tom lee jpm

www.morganmarkets.com

North America Equity Research11 October 2012

S&P 500 3Q EPS: Bad Does Not Mean BrokenDomestic Getting Stronger; Int'l Potentially Troughing; 14 Ideas

Portfolio Strategy

Thomas J Lee, CFA AC

(1-212) 622-6505

[email protected]

Katherine C Khor

(1-212) 622-0934

[email protected]

J.P. Morgan Securities LLC

See page 54 for analyst certification and important disclosures.J.P. Morgan does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.

With 3Q12 results upon us, the critical issue is whether these weak results point to (i) earnings having peaked in this cycle already and we are tipping into a global recession (bad, obviously) or (ii) 3Q reflects a trough in the cycle and earnings should accelerate (given strengthening in the US coupled with stabilization in Europe and China). We subscribe to the latter view and highlight some perspectives below:

Global PMIs are inching upwards, a signal supported by steepening yield curves… Global PMIs have begun to improve (US above 50) and J.P. Morgan economics Nowcasting tool sees PMIs gaining in October (see Figure 2), in line with their view that businesses continue to expand. A forward rise in the PMIs is supported by the steepening of the 30yr vs 10yr curve which historically has presaged further gains in PMIs (see Figure 6).

…a positive for Industrial and Technology earnings, which account for 90% of the Q/Q decline in 3QE EPS. This points to future improvements in Q/Q and Y/Y growth for both Industrial and Technology earnings, both of which are closely linked to movements in the PMI (see Figure 3 and Figure 4). Combined, Industrial

and Technology account for $0.56 of the Q/Q decline in EPS (3QE vs 2Q), or 90% of the decline (see Figure 1).

Domestically oriented companies are on balance lifting estimates, drag is global (Figure 17). Those companies with lowest international exposure (lowest third) saw 3Q estimates gain 1% on average since June while those with the heaviest saw an 11% decline. While this is not entirely surprising (and our thesis for 2012), this bolsters our view that investors should focus on US-centric Cyclicals in 2012.

Financials are likely to be one of the bright spots in 3Q, and recall that US credit agencies purge foreclosures and bankruptcy filings after 7 years—2005 was the peak year of filings at 2mm (see Figure 14). Financials are one of threegroups that saw estimates raised in 3Q (Figure 18) reflecting improving credit trends and loan demand (along with US housing and employment, etc.). But a tailwind is building in 2013, in our view, which is the resetting of the credit scores for millions of Americans. The peak year of personal bankruptcies was 2005 and those records are removed from credit reports after 2012. Thus, beginning in 2013, we should see rapid improvements in the credit quality of millions of Americans.

Discretionary earnings (and domestic Cyclicals) should get a lift from the record $5.3T wealth effect in 2012 (Figure 10), boosting 2013 GDP by 1.6%. The combined $5.3T “wealth effect” in 2012 from the rise in equities ($3.6T) and housing ($1.7T) is the largest such increase in the past 12 years (and exceeds 2003’s $5.1T). It also reverses about half of the cumulative losses since 2007 ($13T lost in 2008 alone). Our economists estimate that for each $100 in wealth, $5 is spent on consumption in the following year—or $265b incrementally, representing 1.6% lift to 2013 GDP. This should directly boost Consumer Discretionary earnings which closely track US consumer confidence (Figure 13). And we would argue the continued rise in confidence, despite corporate cautiousness, is a direct result of this “wealth effect.”

Source: J.P. Morgan and Bloomberg.

S&P500 (LHS)

10/11/121,433

Cyclicals (RHS),

10/11/12, 113

Defensives (RHS)

10/11/12112

95

100

105

110

115

120

1,250

1,300

1,350

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1,500

12/11 2/12 4/12 6/12 8/12 10/12 12/12

100=

star

t of y

ear

S&P500 (LHS) Cyclicals (RHS)

Defensives (RHS)

1Q12 2Q12 3Q12 QTD YTD

S&P500 12% -3% 6% -1% 14%

Cycl (Mat, IT, Disc, Ind) 14% -5% 5% -1% 13%

Near- Cycl(Ener, Fin) 12% -7% 8% 1% 14%

Def (Stpl, HC, Tel, Util) 3% 5% 3% -0% 12%

Valuation:

2012E 2013E

S&P500 Level 1433 —

EPS $105 $110

P/E (current) 13.6x 13.0x

Div Yield 2.2% 2.4%

Short-term Target (by election day):

S&P500 1495 —

P/E — 13.6x

Year-End Target:

S&P500 1430 —

P/E — 13.0x

2


Thomas J Lee, CFA(1-212) [email protected]

Thus, there are some reasons to expect rising S&P 500 estimates, something suggested by the continued rise in economic momentum indicators (like the Citi Eco Surprise Index, see Figure 15). The US CESI (CESIUSD Index GP <<GO>>) has been rising since summer of 2012 and is currently at 43. Since 2007, whenever the CESI has been above 40, EPS revisions have moved positively 4 of the 5 times (one time revisions went flat) and we believe the arguments above point to reasons to see estimates revised higher in coming months. More arguments are covered in this report.

Bottom-line: While equities have faltered in the past 4 weeks, the positive thesis remains intact – 14 ideas. Investors are understandably nervous given the heavy negative pre-announcements (see Figure 21) and the overall weakness in markets. We do not believe US earnings have peaked (S&P 500 EPS likely peaks around $145-$160 per share (see “US Equity Strategy FLASH: Weak 2H...” dated 9/27/12). And, as a consequence, we view recent weakness in stocks as an attractive entry point. We have identified 14names that are domestically focused, beat EPS recently and have insider buying. The tickers are: KR, WFC, CVS, M, UNP, FITB, STI, BBBY, CTAS, EQR, KEY, GPC, NOC and NI (see Figure 20).

https://mm.jpmorgan.com/PubServlet?action=open&doc=GPS-950186-0.pdf

3



The problem in 3Q is 4 sectors: Energy and Materials (Commodities) and Industrials and Technology (China and Europe)…global bad, US-centric good

Take a look at Figure 1 below which highlights quarterly EPS contributions by sector for 3QE (and other quarters as well). Specifically, we highlighted the 4 sectors that are really driving the weak Y/Y and Q/Q results:

Commodity-related: Basic Materials is the largest driver of the Q/Q decline in 3Q12E EPS and that is a simple function of declining prices (more than volumes). Similarly, Energy EPS is also following lower commodity prices.

Downturn in European and China demand: Technology and, to a lesserextent, Industrials are weak Q/Q reflecting the downturn in demand seen in Europe (where economies have been in recession) and China (where economy has been decelerating).

In other words, 3Q is not telling us anything we don’t already know.

Figure 1: Quarterly EPS Forecasts, 2010-2013E

$ per share; Q/Q >1% shaded green, Q/Q <1% shaded red

Source: J.P. Morgan.

2010A 1Q11A 2Q11A 3Q11A 4Q11A 2011A 1Q12A 2Q12A 3Q12E 4Q12E 2012E 2013E

Cyclicals $35.61 $9.63 $10.67 $10.44 $11.34 $42.08 $10.81 $11.33 $10.49 $12.50 $45.13 $52.10

Materials $2.51 $0.93 $1.00 $0.83 $0.56 $3.32 $0.92 $0.90 $0.64 $0.71 $3.17 $4.00

Industrials $7.93 $2.13 $2.46 $2.50 $2.59 $9.68 $2.48 $2.79 $2.55 $2.67 $10.48 $11.76

Discretionary $8.12 $2.00 $2.35 $2.28 $2.41 $9.05 $2.13 $2.44 $2.41 $2.77 $9.74 $11.33

Technology $17.05 $4.57 $4.86 $4.83 $5.77 $20.03 $5.28 $5.21 $4.89 $6.35 $21.73 $25.00

Near Cyclicals $23.55 $7.15 $6.52 $7.85 $6.69 $28.21 $8.00 $7.44 $7.56 $7.83 $30.82 $33.76

Energy $10.24 $3.24 $3.82 $3.82 $3.09 $13.97 $3.35 $3.24 $3.18 $3.13 $12.90 $13.40

Financials $13.31 $3.91 $2.70 $4.03 $3.60 $14.24 $4.65 $4.19 $4.38 $4.69 $17.92 $20.35

Defensives $26.33 $6.72 $6.96 $7.36 $6.52 $27.55 $6.79 $7.07 $7.17 $6.78 $27.81 $30.31

Staples $9.42 $2.28 $2.54 $2.57 $2.60 $9.98 $2.38 $2.57 $2.55 $2.75 $10.24 $11.22

HealthCare $11.54 $3.14 $3.12 $3.14 $2.94 $12.34 $3.15 $3.21 $3.04 $3.02 $12.41 $13.41

Telecom $2.07 $0.53 $0.52 $0.56 $0.36 $1.98 $0.54 $0.55 $0.53 $0.39 $2.00 $2.42

Utilities $3.31 $0.77 $0.77 $1.09 $0.62 $3.26 $0.73 $0.74 $1.05 $0.63 $3.16 $3.26

Total B/U EPS $85.49 $23.50 $24.14 $25.65 $24.55 $97.84 $25.60 $25.84 $25.22 $27.10 $103.76 $116.16

JPM Strategy $26.00 $27.56 $105.00 $110.00

Commodities

China and Europe

4



#1: Global growth poised to move higher, boosting Industrial & Technology EPS

The improvement in September PMIs bolsters our economists’ expectations that global growth is poised to move modestly higher. As shown in Figure 2 below, their Nowcast (which is more real-time than September PMIs) shows this strength has continued in recent weeks. There is data supporting this: new orders components were promising, US Sept labor report was solid, and it now seems that the capital goods declines in recent months were more an “air pocket” (Bruce Kasman’s words).

Figure 2: J.P. Morgan Nowcast Shows Global Growth Strengthening…

Source: J.P. Morgan, from “Global Data Watch”dated 10/5/12.

Industrial and Technology EPS should start improving…

Notice how closely Technology (Figure 3) and Industrial EPS (Figure 4) have followed changes in PMI. This suggests to us that the slump seen in both sectors should soon recover. As highlighted by the arrows, the Global PMI is recovering (y/y growth rates).

Figure 3: Technology EPS and Global PMI (% chg y/y)


Figure 4: Industrials EPS and Global PMI (% chg y/y)


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https://mm.jpmorgan.com/MorganMarkets?page=analyst_page&sid=U018173


5



30Y vs 10Y yield curve steepening supports further gains in PMIs...

Long-term yield curves have steepened recently (see Figure 5) in many regions. We have highlighted US, Germany and Spain in the figure below. Note that Spain’s long-end curve basically inverted earlier this year (a sign of recession, which indeed is happening). We like to look at the longer-end of the curve as it is less subject to actions by central banks.

Note how historically changes in the yield curve (long-end) have presaged gains in the PMI. We have plotted the US data below in Figure 6 and, as shown, the steepening of the curve is the steepest since mid-2011.

Recall that since mid-2011 US economic momentum has improved considerably. We believe the recent steepening suggests a similar improvement in coming months.

Figure 5: Yield Curves Are Steepening... 30Y vs 10Y Spreads


Figure 6: Does YC Lead ISMs? Chg in 30Y vs 10Y and Change in PMIy/y delta


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6



#2: Industrial metals recovering, positive for Energy & Basic Materials EPS

While headline commodity prices continue to show mixed results (see Figure 7), the “common factor,” which measures underlying demand, continues to improve. We believe this supports the improvements in PMI noted previously.

Figure 7: The “Common” Factor Among Commodity Prices Is Improving...

Source: J.P. Morgan, from “Global Data Watch” dated 10/5/12. Note: Oil is Brent while industrial metals and agriculture are the

J.P. Morgan commodity curve indexes. Common movements for each are given by the common factor scaled by each commodity’s

individual loading weight. The idiosyncratic movement is the residual.

Energy and Basic Materials EPS closely track moves in industrial metals indices… implying improvements in coming quarters for EPS

One of our favorite series to track industrial metal demand is the DJ-UBS Industrial Metals index (DJUBSIN Index GP <<GO>>) and this index has been improving since bottoming in August 2012.

This bodes well for improvements in Basic Materials and Industrials EPS in coming quarters as shown in Figure 8 and Figure 9.

Figure 8: DJUBSIN vs Materials EPS


Figure 9: DJUBSIN vs Energy EPS


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7



#3: 2012 US wealth effect $5T, largest since before 2004 – US consumers are gaining confidence, which supports higher Discretionary EPS

$5.3T wealth effect in 2012 (housing and stocks), largest in past 12 years

The wealth effect is the improvement for households from change in the value of assets. The most significant assets for US households are equities ($22T held) and housing ($18T held). For equities, the wealth effect is the gain from stock appreciation (we use the S&P 500 as the proxy) and housing (Case-Shiller gain).

The data is compiled in Figure 10 below. Note that in 2012 equity gains are $3.6T and US housing gains are $1.7T, or $5.3T in total.

This is the largest increase in the past 12 years. The next largest increase was in 2003, which was $5.1T.

Historically, for every $100 rise in wealth, J.P. Morgan estimates that this results in a $5 increase in consumption over the following year. This implies about $265b increase in consumption in 2013, or 1.6% lift to GDP.

Figure 10: US Wealth Effect (2000 to 2012)

Source: J.P. Morgan, Bloomberg and Federal Reserve. Note: 2012* reflects annualized data. Prior yr ending balance in HH and NP

holding of corporate equities reflects Federal Reserve Flow of Funds (Z1) "households and nonprofit organizations, directly and

indirectly held corporate equities; asset." % change in stock market reflects S&P 500 data.

Wealth Effect from Stock Market Wealth Effect from Housing Total Wealth Effect

Prior yr ending

balance in HH

and NP

holdings of

corporate

equities ($bn)

% chg

in stock

market

(Prior yr ending

balance in HH and

NP holding of

corporate equities) x

(% chg in stock

market)

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year

housing

value

($bn)

% chg

in Case-

Shiller

20-city

(Prior yr ending

housing value)

x (% chg in

Case-Shiller 20-

city index)

Aggregate

Wealth Effect

($bn)

2000 17,203 -10% (1,744) 16,446 12% 1,904 160

2001 15,350 -13% (2,002) 16,894 8% 1,340 (662)

2002 13,474 -23% (3,148) 18,899 12% 2,310 (838)

2003 10,596 26% 2,795 20,556 11% 2,333 5,128

2004 14,123 9% 1,270 22,575 16% 3,651 4,921

2005 15,985 3% 480 24,981 16% 3,878 4,358

2006 17,396 14% 2,369 28,033 1% 189 2,558

2007 20,361 4% 719 28,260 -9% (2,552) (1,833)

2008 20,947 -38% (8,062) 26,575 -19% (4,947) (13,008)

2009 12,463 23% 2,923 22,889 -3% (707) 2,216

2010 15,967 13% 2,041 22,301 -2% (535) 1,506

2011 18,505 0% (1) 22,343 -4% (909) (909)

2012 18,029 20% 3,582 21,540 8% 1,700 5,282

heavylosses

8



First improvement in housing wealth effect since 2006

The combined positive wealth effect from equity markets and home equity for US households in 2012 is $5T, comprising $3.6T from equities (Figure 11) and $1.7T from US housing (Figure 12).

For the first time since 2005, US home prices have risen YTD and, as we have written in several pieces (see “US Housing Food Chain IV” dated 8/29/12), we see this recovery as not only sustainable but only 1 year into a 3- to 5-year cycle.

This $5T figure is the largest since before 2004 (or 8 years) and reverses the massive drags on wealth effect from 2007 to 2011. Consider that in 2008 the wealth effect was a staggering $13T in losses.

Figure 11: Stock Market Wealth 2012 – $3.6T$ billions

Source: J.P. Morgan, Bloomberg, Federal Reserve Flow of Funds. Note: Reflects

Federal Funds Flow of Funds (Z1) data, "households and nonprofit organizations,

directly and indirectly held corporate equities; asset." While % change in stock market

reflects S&P 500 data.

Figure 12: Housing Wealth 2012 – $1.7T$ billions

Source: J.P. Morgan and Bloomberg. Note: 2012* reflects annualized.

Impact on US consumption may be $250b in 2013...

According to our US economists, the impact on consumption from this wealth effect is about 5%—that is, about 5% of each $1 of higher wealth is spent over the next year.

This implies a $250b tailwind from the $5T wealth effect. This works out to a 1.6% lift to US GDP in 2013 (on $15T economy).

We have not heard investors talk about the potential boost to 2013 growth (and this is not in our base case) but this could arguably offset a portion of the US fiscal cliff.

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9



…and this argues for further improvements in Consumer Discretionary EPS

Tailwinds remain strong for companies with US exposure. The wealth effect, in our view, explains in part why US consumer confidence continues to strengthen even as the global economy remains sluggish.

But given the $5T wealth effect noted above, we believe US consumer confidence is poised to gain further in 2013.

Such gains in consumer confidence (see Figure 13) suggest we should see Consumer Discretionary EPS continue to expand at a healthy pace. Since 2004, the relationship between these factors has been significant.

Figure 13: Two-Year % ∆ in Consumer Confidence vs Discretionary Sector EPS

Two-year % change in consumer confidence and the level of Consumer Discretionary EPS


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10



#4: Remember the number 7 – peak ’05 bankruptcies now being purged from credit record…positive for Financials

When an American files for bankruptcy, his/her credit record reflects this event for 7 years and is then purged. This is very important.

Why? Take a look at Figure 14 below. US personal bankruptcy filings peaked in 2005 at 2.039mm (in retrospect, this was a bad sign).

Using the 7-year guideline, this implies that after 2012, millions of Americans should see their credit scores dramatically improve (the bankruptcy is purged).

This sets the stage for more Americans to meet the underwriting standards of banks (which are currently only approving Americans with higher FICO scores) and would further support a recovery in the US housing market.

Figure 14: Personal Bankruptcy Filings

Since 2000

Source: J.P. Morgan and the American Bankruptcy Institute.

Separately, we believe that US Financials will have many positive things to say about improving delinquencies, etc.,thus, further setting stage for credit standards to ease

Financials will likely be one of the bright spots in 3Q. Delinquency trends have been improving throughout the last 3 years but we believe in 3Q improvements gained at a faster pace and moved to new cycle lows.

This suggests that bank staff may need to be reallocated, away from “workout/collections” towards originations, and would be another step towards accelerating credit expansion.

Personal Bankruptcies2005

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Americans whose bankruptcy is purged

20122,039,214

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11



#5: CESI is turning up and associated with positive S&P 500 EPS revisions

While we had highlighted the strong relationship between economic momentum (our favorite is the Citi Economic Surprise Index, CESIUSD Index GP <<GO>>) and EPS revisions, the relationship is apparent when looking at Figure 15 below:

Note how, in 5 instances since 2007, an upturn in the CESI was followed by an improvement in the trend of EPS revisions.

The improvement in CESIUSD reflects all of the points in the discussion in previous sections (Global PMIs bottoming, US demand strengthening, US housing accelerating).

So far, EPS revisions have not moved upwards, and this lag has been seen in the previously highlighted examples.

The key takeaway, however, is that we do not believe S&P 500 EPS is peaking. Rather, we think it is reflecting the shift in momentum from global growth to US domestic demand.

Figure 15: EPS Revisions vs. Economic Surprise Index Suggests Future Positive Revisions

EPS revisions are for forward 1 qtr as of each point; CESIUSD Index

Source: J.P. Morgan, Bloomberg, and FactSet.

10/10/1245%

10/11/1245.7

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12



#6: Domestic-oriented companies seeing modest EPS revisions

EPS cuts more pronounced for companies with more “non-US” exposure…

It is important to keep in mind that US-oriented companies (those with heavier US exposure) have seen modest EPS estimate revisions. That is, the bulk of negative EPS estimate revisions has been attributable to those with greater share of sales overseas. Take a look at Figure 16 and Figure 17 below.

The groups that saw positive EPS estimate revisions in the quarter are Financials(particularly those US-oriented), Utilities, Telecom and Energy (US-oriented).

Those with heavy non-US exposure (red dots) saw greater overall EPS estimate cuts since 6/30/12 for 3Q.

On the other hand, take a look at those with little international exposure. As one can see in Figure 17 the reductions in EPS estimates for those with low international exposure have been significantly more modest than for those with high international exposure.

Figure 16: Sector Analysis – % Change in 3Q12 Net Income Estimates Since 6/30/12 vs % of Sales InternationalBetween 6/30/12 and today

Source: J.P. Morgan and FactSet.

Note: % of Sales International. Data is from Dubravko Lakos-Bujas, J.P. Morgan Head of US Quant Strategy.

Figure 17: % Change in 3Q12 Net Income Estimates Since 6/30/12 Based on % Sales InternationalBetween 6/30/12 and today


Note: % of Sales International. Data is from Dubravko

Lakos-Bujas, J.P. Morgan Head of US Quant Strategy.

Energy

Energy

EnergyMaterials

Materials

Materials

IndustrialsIndustrials Industrials

DiscretionaryDiscretionary

Discretionary

Staples Staples

Staples

HealthCareHealthCare

HealthCare

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https://mm.jpmorgan.com/MorganMarkets?page=analyst_page&sid=R299886



13



Looking at this across sectors, Cyclicals see biggest EPS reductions into 3Q

Looking at 3Q specifically by sector, we have made a simple waterfall chart below. What one can see is that Technology and Energy account for 2/3 of the EPS cut since the start of the quarter.

In other words, the reduction in 3QE EPS is heavily concentrated. So of the $1.30cut in 3QE EPS since 6/30/12, Technology and Energy represented the majority.

Estimates were actually modestly increased overall for Telecom, Financials and Utilities.

Figure 18: Sector Contribution Analysis – S&P 500 3Q12 EPS Estimate Revision Since 6/30/2012Between 6/30/12 and today


Figure 19: % Contribution of Sectors to 3Q12E EPS Revisions vs Earnings Weight


$26.27 -$0.48

-$0.38

-$0.19

-$0.15

-$0.11-$0.10

-$0.01 +$0.01 +$0.03+$0.09 $24.97

S&P500 3Q12E Est as of 6/30/12 S&P500 3Q12E Est as of Today

Sta

ples

Mat

eria

ls

Fin

anci

als

Util

ities

Dis

cret

iona

ry

Indu

stria

ls

Tel

ecom

Hea

lthC

are

Tec

hnol

ogy

Ene

rgy

Energy

Materials

Industrials

DiscretionaryStaples

HealthCareFinancials

Technology

Telecom

Utilities

(10%)

(5%)

0%

5%

10%

15%

20%

25%

30%

35%

40% 0% 10% 20% 30% 40%

% C

on

trib

utio

n to

3Q

12 E

PS

Cha

nge

% of S&P500 Total Net Income

NEGATIVE:revisions are larger than earnings

POSITIVE:revisions are smaller than earnings weight

14



MARKET STRATEGY: 14 ideas with domestic exposure

On balance, we think the S&P 500 will deliver earnings that will, on balance, be better than expectations. So, what should investors consider? We have identified 14 names that are domestically focused, beat EPS recently and have insider buying. We used the following criteria:

The stock is in the S&P 500;

It is in lowest quartile of exposure to international sales for its specific sector;

In the past 6 months, there has been insider buying; and

The company has exceeded Street forecasts on EPS beats for each of the last two quarters (1Q12 and 2Q12).

On average, these 14 names have 12% upside to J.P. Morgan target prices (for those that are covered) and a 2013E P/E of 11.3x.

Figure 20: 14 Domestically Oriented Stocks

Priced as of 10/10/12


% of Sales International Data is from Dubravko Lakos-Bujas, J.P. Morgan Head of US Quant Strategy.

JPM Coverage Screen Metrics EPS and Valuation

3Q12

Reporting

Date

Name Sub-Industry Ticker

Current

Price

Market

Cap

JPM

Rtg JPM Analyst

Target

Price

Implied

Upside

%

Sales

Int'l

Insider Net

Shares

Purchased

(last 6m)

1Q12

EPS

Beat

2Q12

EPS

Beat

2013E

EPS

P/E

('13E) P/B Date

1 Kroger Co. Food Retail KR $23.30 $12,293 N Ken Goldman $29.00 24% 0% 269,974 3% 2% $2.56 9.1x 3.24x 11/29/12

2 Wells Fargo & Co. Diversified Banks WFC $35.23 $186,091 OW Vivek Juneja $42.00 19% 0% 72,974 3% 5% $3.67 9.6x 1.35x 10/12/12

3 CVS Caremark Corp. Drug Retail CVS $48.06 $61,144 OW Lisa C. Gill $57.00 19% 0% 5,995 5% 11% $3.79 12.7x 1.61x 11/6/12

4 Macy's Inc. Department Stores M $39.00 $15,698 OW Matthew R. Boss, CPA$46.00 18% 0% 5,180 19% 3% $3.80 10.3x 2.67x 11/7/12

5 Union Pacific Corp. Railroads UNP $120.93 $57,273 OW Thomas R. Wadewitz$140.00 16% 0% 117,634 15% 5% $9.51 12.7x 3.00x 10/18/12

6 Fifth Third Bancorp Regional Banks FITB $15.82 $14,537 N Vivek Juneja $18.00 14% 0% 25,000 32% 18% $1.59 10.0x 1.09x 10/18/12

7 SunTrust Banks Inc. Regional Banks STI $29.66 $15,971 OW Vivek Juneja $33.50 13% 0% 16,354 39% 35% $2.79 10.6x 0.79x 10/22/12

8 Bed Bath & Beyond Inc.Homefurnishing Retail BBBY $61.43 $14,080 N Christopher Horvers, CFA$69.00 12% 0% 88,365 14% 9% $5.15 11.9x 3.59x 12/18/12

9 Cintas Corp. Diversified Support ServicesCTAS $41.97 $5,251 OW Andrew C. Steinerman$47.00 12% 0% 91,929 21% 3% $2.81 15.0x 2.44x 12/20/12

10 Equity Residential Residential REITs EQR $56.34 $16,959 N Anthony Paolone, CFA$63.00 12% 0% 15,869 74% 6% $1.22 46.0x 2.98x 10/24/12

11 KeyCorp Regional Banks KEY $8.59 $8,104 OW Steven Alexopoulos, CFA$9.50 11% 0% 6,672 11% 26% $0.86 10.0x 0.82x 10/18/12

12 Genuine Parts Co. Distributors GPC $61.32 $9,511 N Christopher Horvers, CFA$66.00 8% 1% 33,368 8% 1% $4.38 14.0x 3.26x 10/18/12

13 Northrop Grumman Corp.Aerospace & Defense NOC $68.21 $16,862 N Joseph B. Nadol III$52.00 -24% 6% 128,884 20% 15% $7.03 9.7x 1.58x 10/24/12

14 NiSource Inc. Multi-Utilities NI $25.55 $7,279 — — — — 0% 36,671 1% 21% $1.57 16.3x 1.43x 10/22/12

Average 12% 1% 19% 12% 11.3x 2.02x


15



Appendix I:

Negative preannouncements are high at 73% of total, consistent with past 3 quarters...

Negative preannouncements for the 3Q earnings season continue to be elevated, reflecting the macro headwinds from the global economy. Negativepreannouncements persist at 73% of all preannouncements as of 10/10/2012, above the prior three quarters’ relatively elevated readings.

Figure 21: Negative and Positive Preannouncements % of Total Quarterly Preannouncements, as of 10/10/2012 Director’s Report

Source: J.P. Morgan and Thomson Reuters.

52% of companies have beaten 3Q12 results…

Early results show 3Q12 EPS beats at around 52%, which is below recent quarters, particularly 2Q12. 2Q12 started off stronger with 68% beating through the first few weeks but by the end of the quarter 2Q12 proved to be in line with past quarters.

10/10/1273%

10/10/1218%

10/10/124.09

0%

10%

20%

30%

40%

50%

60%

70%

80%

4/01 7/02 10/03 1/05 4/06 7/07 10/08 1/10 4/11 7/12

# o

f Pre

ann

oun

cem

ents

Recession Positive Preannouncements as % Total Negative Preannouncements as % Total N/P Ratio (right axis)

16



Figure 22: % of Companies Beating on Top Line and EPS

% of S&P 500 that has reported, beating on top line and EPS, 3Q12


3Q12 "% cos beating (as of early in earnings season)” is based on 25 companies that have reported earnings as of 10/8/12.

2Q12 "% cos beating (as of early in earnings season)” is based on 25 companies that have reported earnings as of 7/11/12.

S&P 500 3Q12 top-line growth expected to be down yoy with earnings growth of 2% yoy

We continue to see the headwind effects of the Eurozone crisis, China slowdown and now-weakening U.S. momentum, which are combining to generate weak revenue growth in 3Q12.

As evidenced in Figure 23, growth has certainly slowed. YoY revenue growth for the S&P 500 is expected to be down in 3Q12 following downward YoY trends seen in 2Q12.

However, if we consider the S&P 500 ex-Energy (see Figure 23), YoY revenue growth is expected to come in flat in 3Q12. While such is even below recent trends of positive growth seen in S&P 500 ex-Energy since 2010, if we exclude Energy in our calculations, most of the other sectors look less dim.

Figure 23: YoY % Change in Revenue Growth


49%

62%

36%

61%69%

61%

42%47%

68%

52%

0%

20%

40%

60%

80%

100%

4Q11 1Q12 2Q12 3Q12 4Q11 1Q12 2Q12 3Q12

% c

os

be

ati

ng

% cos beating % cos beating (as of early in earnings season)

Revenues EPS

11.3%8.5% 7.6% 8.2% 8.9%

10.9%10.5%

6.5%4.3%

-0.4%-3.0%

1Q1

0

2Q1

0

3Q1

0

4Q1

0

1Q1

1

2Q1

1

3Q1

1

4Q1

1

1Q1

2

2Q1

2

3Q

12E

S&P500

Revenue YoY % Chg

8.3%6.3% 6.5% 7.1% 6.3%

7.8% 7.9%

5.1% 4.4%

2.1%

0.0%

1Q1

0

2Q1

0

3Q1

0

4Q1

0

1Q1

1

2Q1

1

3Q1

1

4Q1

1

1Q1

2

2Q1

2

3Q

12E

S&P500 Ex-Energy

Revenue YoY % Chg

Fewer top-line beats…. In-line beats…

17



Similarly, earnings growth in 3Q12 is expected to be weak, at 2.4% YoY. This is a decrease from 4.5% just a quarter ago, and down from 17.9% in 3Q11.

However, when we consider earnings growth for the S&P 500 ex-Energy, 3Q12 earnings growth is expected to be 5.9% YoY, which is below YoY growth since 1Q10.

Figure 24: YoY % Change in Earnings Growth


53.6%

34.0%32.9%34.2%

19.2%12.4%

17.9%8.9% 8.9%

4.5% 2.4%

1Q10

2Q10

3Q10

4Q10

1Q11

2Q11

3Q11

4Q11

1Q12

2Q12

3Q12

E

S&P500

EPS YoY % Chg

53.1%

29.1%32.7%33.5%

16.5%8.3%

13.1%8.1% 10.3% 9.1% 5.9%

1Q1

0

2Q1

0

3Q1

0

4Q1

0

1Q1

1

2Q1

1

3Q1

1

4Q1

1

1Q1

2

2Q1

2

3Q

12E

S&P500 Ex-Energy

EPS YoY % Chg

18



US Macro Indicators

The macro environment remains relatively troubling as 4 of the 7 indicators detailed in Figure 25 worsened in 3Q12 as compared to 2Q12. In particular, improvements were seen in ISM Non-Manufacturing New Orders as well as ABI Residential Billing.

Figure 25: MACRO – Trends Indicate Mixed Momentum in 3Q12

Trend in macro indicators

Source: J.P. Morgan estimates and J.P. Morgan Economics.

Micro indicators

Figure 26 lays out several key micro indicators and their respective performance in each quarter versus recent trend.

Following relative declines in 2Q12, micro indicators were once again relatively weak in 3Q12. Of the micro indicators below, US Machine Tool Orders, the Case Freight Index, Corrugated box shipments, Air Freight Traffic, Auto Sales and Credit card charge volumes all slowed or worsened in 3Q12.

On the other hand, Housing Permits and Income Tax Withholdings improved in 3Q12 relative to 2Q12, highlighting the strengthening in the microeconomic environment, particularly as housing continues to recover from historic lows (see “US Housing Food Chain IV” dated 8/29/12).

Note the recent upwards curl of the YoY change in income tax withholdings (trailing 120-day average). As seen in Figure 27 there has been a recent uptick in income tax withholdings implying that average salaries and wages are higher overall.

3Q11 4Q11 1Q12 2Q12 3Q12

3Q11-

2Q12 avg

Macro

Index of Leading Economic Indicators (yoy %∆) 5.0 3.9 2.7 1.6 1.8 3.3

• trend worse worse worse worse better worse

Index of Coincident Indicators (yoy %∆) 2.2 2.7 2.4 2.9 2.5 2.5

• trend stable stable worse worse worse stable

ISM Manufacturing (New Orders minus Inventory) -0.3 8.2 6.0 9.2 -1.7 5.8

• trend worse better worse better worse worse

ISM Non-Manufacturing New Orders 54.4 53.8 59.8 54.1 55.2 55.5

• trend stable stable better worse better stable

China Industrial Production (yoy %∆) 14.1 13.1 11.9 10.2 9.3 12.3

• trend stable slowing worse worse worse better

ABI - Commercial Billing 50.0 53.7 54.4 50.5 46.6 52.2

• trend stable better stable worse worse worse

ABI - Residential Billing 46.9 53.5 52.6 49.5 51.4 50.6

• trend worse better stable worse better better


19



Figure 26: MICRO – Stability in Trends

Trend in micro indicators

Source: J.P. Morgan estimates and J.P. Morgan Economics. Note: *Reflect estimates.

Figure 27: Income Tax Withholdings (trailing 120-day avg.)

yoy % change

Source: J.P. Morgan estimates and J.P. Morgan Economics.

3Q11 4Q11 1Q12 2Q12 3Q12

3Q11-

2Q12 avg

Micro

US Machine Tool Orders (yoy %∆) 80.1 24.8 14.7 5.8 -7.1 31.4

• trend worse worse worse worse worse worse

Cass Freight Index (yoy %∆) 7.6 0.0 1.9 0.4 -1.0 2.5

• trend slowing slowing better slowing slowing slowing

Corrugated box shipments (yoy %∆) 0.2 0.0 0.4 0.1 -2.4 0.2

• trend better stable better better slowing better

Air Freight Traffic (yoy %∆) -2.4 -3.1 -1.0 -1.9 -2.3 -2.1

• trend worse worse better worse worse worse

Housing Permits 629 692 720 756 806 699

• trend better better better better better better

Consumer

Income Tax Withholdings (yoy %∆) 1.7 1.0 1.0 2.0 4.0 1.4

• trend worse worse stable better better better

Auto Sales (SAAR, millions ) 12.6 13.4 14.1 14.1 14.5 13.6

• trend better better better slowing slowing better

Credit card charge volumes (yoy %∆) 8.8 8.5 10.5 7.9 7.5* 8.9

• trend stable stable better worse worse stable

-15%

-10%

-5%

0%

5%

10%

15%

20%

1/1/2007 1/1/2008 1/1/2009 1/1/2010 1/1/2011 1/1/2012

yoy % chg of trailing 120day avg

20



Despite appearances, 3Q12 is expected to be a decent quarter for Cyclicals

We have compiled bottom-up revenue and net income forecasts in Figure 28 below. Notably, despite the numerous headwinds, there are several industries that still should show solid growth.

Many key Industrials and Technology groups like Construction, Electrical Equipment, IT Services and Computer & Peripherals are expected to post solid y/y gains on fairly strong sales growth. Industrials as a sector is expected to grow earnings by 0.8% YoY and top line by 2.4% YoY.

There are some signs of weakness is several sub-industries, mostly within the Materials and Discretionary sectors. Particularly large drags are expected in Metals & Mining, Paper & Forest Products, Automobiles and Diversified Consumer Services.

Figure 28: 2Q12 and 3Q12E YoY Revenue and Earnings Growth – Cyclicals

2Q12 and 3Q12E YoY Revenue and Earnings Growth – Cyclicals


Revenue Net Income

2Q12 vs.

2Q11

YoY %

chg

3Q12E

vs. 3Q11

YoY %

chg

2Q12 vs.

2Q11

YoY %

chg

3Q12E

vs. 3Q11

YoY %

chg

Cyclicals 5.5% 4.5% 7.8% 2.1%

Materials 12.3% 11.1% -0.9% -7.9%

Chemicals 30.1% 29.6% 30.2% 21.9%

Construction Materials -1.1% 3.5% -288.7% —

Containers & Packaging 7.7% 8.9% 1.6% -11.1%

Metals & Mining -13.8% -14.7% -47.9% -43.9%

Paper & Forest Products 3.6% 2.6% -34.8% -22.9%

Industrials 4.9% 2.4% 12.3% 0.8%

Aerospace & Defense 0.5% 0.4% 2.6% -14.2%

Building Products -0.9% 0.9% 100.0% 53.3%

Construction & Engineering 16.6% 16.8% 12.7% 22.4%

Electrical Equipment 20.4% 18.7% 30.6% 21.7%

Industrial Conglomerates 3.3% 3.2% 9.0% 10.9%

Machinery 8.9% 2.8% 22.5% 10.0%

Trading Companies & Distributors 12.9% 9.9% 13.5% 15.2%

Commercial Services & Supplies 4.5% -8.0% 13.0% -18.9%

Professional Services 5.8% 4.2% 19.5% 11.8%

Air Freight & Logistics 2.8% 2.4% 7.7% -1.3%

Airlines 11.6% 1.3% 125.6% 6.2%

Road & Rail 3.4% 1.2% 14.0% -0.1%

Revenue Net Income

2Q12 vs.

2Q11

YoY %

chg

3Q12E

vs. 3Q11

YoY %

chg

2Q12 vs.

2Q11

YoY %

chg

3Q12E

vs. 3Q11

YoY %

chg

Discretionary 0.2% 1.3% 3.8% 4.8%

Auto Components 10.0% 10.1% 39.0% 17.0%

Automobiles -5.6% -0.2% -48.7% -38.2%

Household Durables 1.8% 7.4% 302.9% 84.5%

Leisure Equipment & Products -4.8% 2.5% 9.7% 5.7%

Tex tiles Apparel & Luxury Goods 18.0% 13.3% 5.8% 4.0%

Hotels Restaurants & Leisure 5.4% 4.1% 1.2% 3.7%

Diversified Consumer Serv ices -40.1% -35.7% -77.5% -159.5%

Media 1.5% 4.1% 3.5% 11.2%

Distributors 4.8% 6.0% 11.1% 14.9%

Internet & Catalog Retail 27.0% 24.9% -13.6% -4.6%

Multiline Retail -17.7% -15.3% 8.2% 64.9%

Specialty Retail 2.6% -0.4% 11.7% 2.3%

Technology 10.3% 8.8% 9.2% 3.2%

Internet Software & Services 27.4% 37.9% 18.0% 9.0%

IT Services 16.1% 14.9% 19.4% 17.6%

Software 3.0% -2.7% 1.4% -9.1%

Communications Equipment 4.9% 3.3% 12.9% 4.0%

Computers & Peripherals 11.0% 10.7% 19.7% 18.5%

Electronic Equipment Instruments & Components39.3% 39.2% 5.6% 0.8%

Office Electronics -1.3% -1.3% -8.4% -8.7%

Semiconductors & Semiconductor Equipment0.2% -6.4% -14.8% -25.7%

21



Energy is expected to see large drags in 3Q12. The YoY growth in earnings for 3Q12 is expected to be -15.1%. Top line is also expected to be -2.0% YoY. This makes sense considering how far oil prices have declined.

Figure 29: 2Q12 and 3Q12E YoY Revenue and Earnings Growth – Near-Cyclicals

2Q12 and 3Q12E YoY Revenue and Earnings Growth – Near-Cyclicals


Revenue Net Income

2Q12 vs.

2Q11

YoY %

chg

3Q12E

vs. 3Q11

YoY %

chg

2Q12 vs.

2Q11

YoY %

chg

3Q12E

vs. 3Q11

YoY %

chg

Near-Cyclicals 3.9% -5.2% 15.1% -3.4%

Energy 4.6% -2.0% -13.8% -15.1%

Energy Equipment & Serv ices 23.0% 18.6% 24.7% 6.0%

Oil Gas & Consumable Fuels 3.1% -3.9% -18.1% -17.9%

Financials 3.0% -9.4% 55.4% 7.6%

Commercial Banks 3.5% 9.3% 13.3% 27.5%

Thrifts & Mortgage Finance -6.1% -6.6% -6.9% -3.3%

Diversified Financial Serv ices 5.9% -11.4% 3006.9% -41.5%

Consumer Finance 10.0% 13.8% -28.4% 8.7%

Capital Markets -4.5% 7.7% 29.9% 13.3%

Insurance 1.6% -22.4% 34.1% 83.0%

Real Estate Investment Trusts (REITs) 16.7% 13.3% -20.8% 25.0%

Real Estate Management & Development12.6% 9.8% 31.4% 37.2%

22



Figure 30: 2Q12 and 3Q12E YoY Revenue and Earnings Growth – Defensives

2Q12 and 3Q12E YoY Revenue and Earnings Growth – Defensives


Revenue Net Income

2Q12 vs.

2Q11

YoY %

chg

3Q12E

vs. 3Q11

YoY %

chg

2Q12 vs.

2Q11

YoY %

chg

3Q12E

vs. 3Q11

YoY %

chg

Defensives 0.9% 2.1% 1.2% -2.0%

Staples 1.2% 1.6% 2.0% 1.1%

Food & Staples Retailing 0.4% 2.1% 4.3% 7.3%

Beverages 1.5% 1.1% 0.8% -5.1%

Food Products 5.9% 3.5% 9.5% 11.3%

Tobacco 2.4% 0.1% 1.4% 0.4%

Household Products -1.6% -3.6% -2.1% -4.3%

Personal Products -1.5% -2.5% -40.8% -11.0%

HealthCare 2.5% 2.0% 3.2% -3.4%

Health Care Equipment & Supplies 18.7% 17.7% 19.3% 18.6%

Health Care Prov iders & Serv ices 2.7% 2.3% 0.1% -0.4%

Health Care Technology 21.6% 14.2% 35.5% 23.2%

Biotechnology 7.9% 13.4% 10.3% -0.7%

Pharmaceuticals -3.5% -4.4% -0.9% -9.8%

Life Sciences Tools & Services 4.6% 1.2% 9.7% -0.4%

Telecom 3.9% 3.5% 3.7% -7.7%

Diversified Telecommunication Serv ices 2.7% 2.3% 9.3% 9.5%

Wireless Telecommunication Serv ices 12.5% 11.7% — —

Utilities -9.3% 3.4% -11.3% -2.4%

Electric Utilities -3.0% 10.9% -6.4% -5.0%

Gas Utilities -8.5% 14.1% 75.3% 52.3%

Multi-Utilities -8.6% 2.4% 1.5% -4.7%

Independent Power Producers & Energy Traders-36.9% -31.2% -67.0% 171.2%

23



Appendix II:

3Q12 reporting statistics so far

Twenty-nine companies have reported 3Q12 earnings so far. As shown in Figure 31, 3Q12 EPS beats are around 52%, which is slightly lower compared to the level of beats seen over the last 4 quarters. However, we are currently seeing stronger top-line beats for 3Q12, with revenue beats at 47%.

Figure 31: % of Companies Beating on Top Line and EPS

% of S&P 500 that has reported, beating on top line and EPS, 3Q12 based on 29 company reports


Figure 32: 3Q12 Sales Statistics So Far

Source: J.P. Morgan estimates and FactSet. Note: % beat for prior quarters is weighted. % beat for current quarter is median % beat.

59%

49%

62%

36%

47%

63% 61%69%

61%52%

0%10%20%

30%40%50%

60%70%80%

3Q11 4Q11 1Q12 2Q12 3Q12 3Q11 4Q11 1Q12 2Q12 3Q12

% c

os

bea

tin

g

Revenues EPS

% Up-/Down-side 3Q12 Sales % of cos beating estimates

So Far Reported…

3Q11 4Q11 1Q12 2Q12

# of

Cos

% Upside/

Downside 3Q11 4Q11 1Q12 2Q12 3Q12

S&P 500 0.9% 0.8% 1.4% -1.4% 30 -0.2% 59% 49% 62% 36% 47%

S&P 500 (ex Fin) 1.2% 1.3% 1.2% -1.3% 28 -0.2% 59% 50% 62% 33% 46%

Cyclicals 0.7% 0.2% 1.2% -1.7% 22 0.0% 61% 48% 68% 28% 50%

Materials 0.8% -0.2% 0.8% -3.7% 3 -6.2% 50% 53% 60% 13% 33%

Industrials 0.4% -1.3% 0.6% -1.5% 2 -0.9% 62% 33% 61% 23% 0%

Discretionary 1.1% -0.2% 0.8% -1.9% 10 0.5% 66% 50% 74% 21% 70%

Technology 0.3% 2.4% 2.4% -1.0% 7 -1.0% 61% 58% 72% 46% 43%

Defensives 0.9% -0.8% -0.6% -1.5% 6 -0.8% 53% 50% 52% 36% 33%

Staples 1.8% -0.1% 0.8% -1.2% 6 -0.8% 64% 52% 60% 38% 33%

Healthcare 1.4% 0.6% 1.3% -0.2% 0 — 67% 61% 73% 41% NA

Telecom -0.4% 1.3% -0.1% -0.3% 0 — 13% 88% 38% 63% NA

Utilities -3.7% -10.4% -12.9% -8.8% 0 — 26% 19% 13% 16% NA

Near-Cyclicals 1.2% 3.7% 4.2% -1.0% 2 1.2% 61% 48% 62% 52% 50%

Energy 2.9% 9.0% 5.2% 0.5% 0 — 64% 62% 63% 50% NA

Financials -1.5% -3.9% 2.7% -2.9% 2 1.2% 59% 40% 61% 53% 50%

24



Figure 33: 3Q12 EPS Statistics So Far

Source: J.P. Morgan and FactSet. Note: % beat for prior quarters is weighted. % beat for current quarter is median % beat.

% Up-/Down-side 3Q12 EPS % of cos beating estimates

Upside/Downside…. So Far Reported…

3Q11 4Q11 1Q12 2Q12

# of

Cos

% Upside/

Downside 3Q11 4Q11 1Q12 2Q12 3Q12

S&P 500 3% 0% 5% 1% 29 1.9% 63% 61% 69% 61% 52%

S&P 500 (ex Fin) 3% 2% 4% 1% 27 1.9% 66% 63% 68% 62% 52%

Cyclicals 2% 6% 8% 2% 21 2.0% 66% 65% 74% 62% 43%

Materials -4% -12% 7% -5% 3 3.4% 38% 43% 69% 52% 33%

Industrials 4% 8% 6% 4% 2 -2.6% 73% 72% 74% 66% 50%

Discretionary 2% 2% 7% 6% 9 1.2% 66% 63% 76% 60% 56%

Technology 2% 9% 10% 1% 7 -0.9% 72% 69% 75% 67% 29%

Defensives 3% 1% 2% 4% 6 2.4% 65% 64% 65% 68% 83%

Staples 1% 0% 3% 1% 6 5.7% 52% 68% 76% 64% 83%

Healthcare 4% 2% 2% 5% 0 — 76% 65% 71% 69% NA

Telecom 6% -10% 14% 3% 0 — 50% 50% 63% 75% NA

Utilities 5% 8% -11% 15% 0 — 68% 60% 37% 69% NA

Near-Cyclicals 2% -10% 5% -3% 2 0.0% 56% 50% 62% 50% 50%

Energy 7% -10% -6% -7% 0 — 66% 48% 40% 40% NA

Financials -2% -9% 15% 1% 2 15.6% 51% 52% 74% 55% 50%

25



Figure 34: 3Q12 Consensus Revenue and Earnings Forecasts for Industries (part 1 of 2)

$ millions


Revenue Net Income

3Q11 2Q12 3Q12E

3Q12E

vs 3Q11

% chg 3Q11 2Q12 3Q12E

3Q12E vs

3Q11 %

chg

Net

Income %

minus

Rev %

Internet & Catalog Retail 14,291 16,090 18,026 26.1% 856 543 757 -11.5% -37.7%

Internet Software & Serv ices 12,027 14,638 14,169 17.8% 4,233 4,554 4,630 9.4% -8.4%

Consumer Finance 14,272 15,523 16,488 15.5% 2,863 2,192 3,113 8.7% -6.8%

Health Care Technology 572 637 653 14.2% 83 103 103 23.1% 8.8%

Computers & Peripherals 87,389 92,638 99,457 13.8% 11,640 13,682 13,221 13.6% -0.2%

Gas Utilities 3,890 3,215 4,414 13.5% 62 97 92 47.4% 33.9%

Construction & Engineering 10,012 11,418 11,335 13.2% 282 325 345 22.4% 9.2%

Containers & Packaging 6,725 7,379 7,597 13.0% 416 374 370 -11.1% -24.0%

Energy Equipment & Services 32,878 35,707 36,858 12.1% 4,222 4,129 4,048 -4.1% -16.2%

Trading Companies & Distributors 2,841 3,054 3,179 11.9% 276 300 318 15.4% 3.5%

Textiles Apparel & Luxury Goods 11,786 11,360 12,878 9.3% 1,414 1,117 1,396 -1.3% -10.5%

Real Estate Management & Development 1,534 1,601 1,676 9.2% 78 88 107 37.2% 28.0%

Insurance 127,696 134,414 137,943 8.0% 6,569 12,169 12,005 82.8% 74.7%

Machinery 56,804 59,905 61,297 7.9% 4,886 5,747 5,302 8.5% 0.6%

Distributors 3,286 3,338 3,545 7.9% 152 169 174 14.9% 7.0%

Household Durables 11,227 11,172 12,077 7.6% 337 1,665 622 84.5% 76.9%

Independent Power Producers & Energy Traders7,055 6,358 7,543 6.9% (16) 317 330 -2162.0% -2168.9%

Biotechnology 8,620 9,670 9,165 6.3% 2,939 3,184 2,825 -3.9% -10.2%

Professional Serv ices 1,914 1,948 2,031 6.1% 194 214 217 11.8% 5.7%

Electrical Equipment 10,302 10,239 10,922 6.0% 1,207 1,265 1,277 5.8% -0.2%

Communications Equipment 20,780 21,766 22,021 6.0% 4,321 4,611 4,486 3.8% -2.1%

Electric Utilities 47,996 39,297 50,852 6.0% 6,588 3,965 6,256 -5.0% -11.0%

Real Estate Investment Trusts (REITs) 9,404 10,255 9,955 5.9% 1,182 1,345 1,428 20.8% 14.9%

Aerospace & Defense 86,264 86,912 91,226 5.8% 6,672 6,574 5,728 -14.2% -19.9%

Wireless Telecommunication Services 10,052 10,710 10,607 5.5% (187) (1,108) (1,174) 526.8% 521.3%

Paper & Forest Products 8,271 8,500 8,717 5.4% 523 285 404 -22.8% -28.2%

Road & Rail 12,524 12,671 13,188 5.3% 1,978 2,089 1,980 0.1% -5.2%

Food & Staples Retailing 235,073 241,562 247,261 5.2% 6,045 6,864 6,485 7.3% 2.1%

Chemicals 49,859 54,333 52,416 5.1% 4,139 6,147 3,623 -12.5% -17.6%

Media 71,543 73,336 75,189 5.1% 6,632 7,928 7,392 11.5% 6.4%

Capital Markets 31,390 31,466 32,969 5.0% 4,926 4,613 5,046 2.4% -2.6%

Life Sciences Tools & Serv ices 6,542 6,764 6,863 4.9% 1,031 1,066 1,027 -0.4% -5.3%

Commercial Banks 39,714 41,872 41,571 4.7% 7,671 8,455 9,786 27.6% 22.9%

Multi-Utilities 29,385 24,668 30,695 4.5% 3,335 2,210 3,179 -4.7% -9.1%

Airlines 4,311 4,616 4,500 4.4% 122 273 134 10.0% 5.6%

Air Freight & Logistics 27,988 28,810 29,209 4.4% 1,727 1,949 1,705 -1.3% -5.6%

Construction Materials 761 694 793 4.3% (17) (17) 22 -226.6% -230.9%

Auto Components 18,642 17,587 19,402 4.1% 856 753 830 -3.1% -7.2%

Industrial Conglomerates 52,107 53,048 54,201 4.0% 5,431 6,252 5,711 5.1% 1.1%

Leisure Equipment & Products 3,375 1,970 3,500 3.7% 472 140 499 5.7% 2.0%

26



Figure 35: 3Q12 Consensus Revenue and Earnings Forecasts for Industries (part 2 of 2)

$ millions


Revenue Net Income

3Q11 2Q12 3Q12E

3Q12E

vs 3Q11

% chg 3Q11 2Q12 3Q12E

3Q12E vs

3Q11 %

chg

Net

Income %

minus

Rev %

41 Building Products 2,006 2,004 2,074 3.4% 27 34 41 53.3% 50.0%

42 Hotels Restaurants & Leisure 28,360 27,001 29,249 3.1% 4,242 3,008 4,332 2.1% -1.0%

43 Diversified Telecommunication Serv ices 66,301 67,536 68,136 2.8% 5,559 6,278 6,105 9.8% 7.1%

44 Health Care Providers & Services 181,237 184,660 186,214 2.7% 5,519 5,501 5,473 -0.8% -3.6%

45 IT Serv ices 53,513 54,221 54,949 2.7% 7,699 8,230 8,261 7.3% 4.6%

46 Food Products 71,164 70,557 72,825 2.3% 3,830 3,842 3,401 -11.2% -13.5%

47 Semiconductors & Semiconductor Equipment32,199 31,250 32,903 2.2% 6,373 5,266 4,667 -26.8% -29.0%

48 Software 33,828 36,823 34,512 2.0% 9,495 11,098 8,753 -7.8% -9.8%

49 Specialty Retail 78,485 81,761 80,047 2.0% 3,800 4,464 3,920 3.1% 1.2%

50 Automobiles 32,333 32,897 32,940 1.9% 2,045 1,450 1,263 -38.2% -40.1%

51 Health Care Equipment & Supplies 22,820 23,234 23,221 1.8% 3,874 4,059 3,917 1.1% -0.7%

52 Beverages 36,732 36,479 37,222 1.3% 5,493 5,531 5,108 -7.0% -8.3%

53 Multiline Retail 47,434 47,883 47,923 1.0% 804 1,473 923 14.8% 13.8%

54 Tobacco 16,003 16,081 16,126 0.8% 4,234 4,244 4,250 0.4% -0.4%

55 Office Electronics 5,583 5,541 5,606 0.4% 374 360 341 -8.7% -9.1%

56 Personal Products 5,239 4,846 5,239 0.0% 450 158 401 -11.0% -11.0%

57 Commercial Services & Supplies 13,531 13,101 13,452 -0.6% 984 894 886 -10.0% -9.4%

58 Electronic Equipment Instruments & Components12,606 11,916 12,429 -1.4% 1,575 1,197 1,203 -23.6% -22.2%

59 Household Products 32,987 31,289 32,455 -1.6% 4,293 3,688 4,108 -4.3% -2.7%

60 Metals & Mining 28,449 26,053 27,482 -3.4% 2,848 1,701 1,552 -45.5% -42.1%

61 Pharmaceuticals 73,387 70,904 70,697 -3.7% 16,453 16,266 14,870 -9.6% -6.0%

62 Thrifts & Mortgage Finance 569 536 538 -5.6% 137 137 133 -3.3% 2.3%

63 Diversified Consumer Serv ices 1,770 1,733 1,626 -8.1% 82 68 (28) -134.5% -126.4%

64 Diversified Financial Services 76,776 68,663 68,075 -11.3% 14,196 10,465 8,356 -41.1% -29.8%

65 Oil Gas & Consumable Fuels 365,938 314,266 296,748 -18.9% 30,876 23,940 22,907 -25.8% -6.9%

27



Appendix III: Summary Tables

Figure 36 through Figure 41 show various metrics for the 3Q12 reporting season at industry, sector, and index levels for the S&P 500.

The tables show the number of companies that belong to each industry and sector, as well as the market capitalization subtotals and the percentages of companies and market caps that have already reported. In these tables, we also provide information by industry and sector on the EPS growth achieved by those companies that have reported, the differential between actual and estimated revenue and EPS growth, and the expected growth for those companies that have yet to report. Moreover, these tablesprovide the percentage of companies that have beaten consensus estimates as well as the percentage that fell below expectations.

28



Figure 36: S&P 500 – Capitalization & EPS Statistics for 3Q12E

Source: FactSet and J.P. Morgan calculations. Note: The estimates may differ slightly from Thomson Financials Director Report's estimates due to methodology differences. Percentages correspond to those companies for which both a IBES Mean Estimate and

Reported EPS figures are available for 3Q12.

S&P 500 — Basic Statistics 3Q12 Reported 3Q12 Earnings Analysis

EPS Reported Upside/ Downside* Estimate**

Sector GICS Industry

# of

Cos

Mkt Cap

($mil)

Mkt Cap

(% )

P/E

(LTM)

(a)

% chg

(NTM vs.

LTM) (b)

(P/E) /

Growth

(a)/(b)

#

Cos

% of

Cos

% of

Mkt

Cap

EPS %

chg yoy

Actual %

chg less

Est. chg % Up % Down

Up less

down %

EPS %

chg yoy

Energy 101010 Energy Equipment & Services 12 $245,412 2% — — — 0 — — — — — -5%

101020 Oil Gas & Consumable Fuels 31 $1,196,494 9% — — — 0 — — — — — -24%

Energy 10 43 $1,441,906 11% — — — 0 — — — — — -22%

Materials 151010 Chemicals 16 $321,286 2% — — — 2 13% 20% -52% -17% 0% 100% -100% -8%

151020 Construction Materials 1 $5,944 0% — — — 0 — — — — — Neg to Pos

151030 Containers & Packaging 4 $15,905 0% — — — 0 — — — — — -12%

151040 Metals & Mining 8 $100,969 1% — — — 1 13% 9% -82% — 100% 0% 100% -42%

151050 Paper & Forest Products 2 $21,230 0% — — — 0 — — — — — -22%

Materials 15 31 $465,334 4% — — — 3 10% 16% -61% -6% 33% 67% -33% -21%

Industrials 201010 Aerospace & Defense 11 $302,284 2% — — — 0 — — — — — -11%

201020 Building Products 1 $5,114 0% — — — 0 — — — — — 50%

201030 Construction & Engineering 3 $19,536 0% — — — 0 — — — — — 22%

201040 Electrical Equipment 4 $67,668 1% — — — 0 — — — — — 6%

201050 Industrial Conglomerates 3 $339,795 3% — — — 0 — — — — — 14%

201060 Machinery 16 $240,034 2% — — — 0 — — — — — 7%

201070 Trading Companies & Distributors 2 $27,139 0% — — — 0 — — — — — 15%

202010 Commercial Services & Supplies 10 $72,988 1% — — — 1 10% 7% 11% 2% 100% 0% 100% -28%

202020 Professional Services 3 $13,091 0% — — — 0 — — — — — 13%

203010 Air Freight & Logistics 4 $97,511 1% — — — 1 25% 29% -1% -8% 0% 100% -100% -2%

203020 Airlines 1 $6,517 0% — — — 0 — — — — — -15%

203040 Road & Rail 4 $103,917 1% — — — 0 — — — — — -1%

Industrials 20 62 $1,295,593 10% — — — 2 3% 3% 0% -7% 50% 50% 0% 0%

Discretionary 251010 Auto Components 3 $28,493 0% — — — 0 — — — — — -5%

251020 Automobiles 2 $46,905 0% — — — 0 — — — — — -38%

252010 Household Durables 7 $37,169 0% — — — 1 14% 16% 309% 123% 100% 0% 100% 73%

252020 Leisure Equipment & Products 2 $16,854 0% — — — 0 — — — — — 7%

252030 Textiles Apparel & Luxury Goods 5 $80,989 1% — — — 1 20% 42% -9% 11% 100% 0% 100% 5%

253010 Hotels Restaurants & Leisure 11 $244,430 2% — — — 4 36% 30% -1% 5% 100% 0% 100% 6%

253020 Diversified Consumer Services 2 $7,692 0% — — — 0 — — — — — Pos to Neg

254010 Media 16 $416,405 3% — — — 0 — — — — — 12%

29



Figure 37: S&P 500 – Capitalization & EPS Statistics for 3Q12E (continued)






# of

Cos

Mkt Cap

($mil)

Mkt Cap

(% )

P/E

(LTM)

(a)

% chg

(NTM vs.

LTM) (b)

(P/E) /

Growth

(a)/(b)

#

Cos

% of

Cos

% of

Mkt

Cap

EPS %

chg yoy

Actual %

chg less


Up less

down %

EPS %

chg yoy

255010 Distributors 1 $9,511 0% — — — 0 — — — — — 15%

255020 Internet & Catalog Retail 5 $155,374 1% — — — 0 — — — — — -13%

255030 Multiline Retail 8 $105,452 1% — — — 1 13% 8% 11% 0% 0% 0% 0% -8%

255040 Specialty Retail 18 $295,272 2% — — — 3 17% 12% 2% -2% 33% 67% -33% 5%

Discretionary 25 80 $1,444,546 11% — — — 10 13% 11% 0% 5% 70% 20% 50% 2%

Staples 301010 Food & Staples Retailing 8 $444,604 3% — — — 2 25% 17% 9% 1% 50% 50% 0% 9%

302010 Beverages 9 $338,501 3% — — — 1 11% 2% -20% 19% 100% 0% 100% -6%

302020 Food Products 15 $236,513 2% — — — 3 20% 19% 13% 9% 100% 0% 100% -3%

302030 Tobacco 4 $259,925 2% — — — 0 — — — — — 1%

303010 Household Products 4 $282,542 2% — — — 0 — — — — — -4%

303020 Personal Products 2 $22,237 0% — — — 0 — — — — — -11%

Staples 30 42 $1,584,322 12% — — — 6 14% 8% 8% 5% 83% 17% 67% -1%

HealthCare 351010 Health Care Equipment & Supplies 14 $228,009 2% — — — 0 — — — — — 2%

351020 Health Care Providers & Services 15 $256,261 2% — — — 0 — — — — — 11%

351030 Health Care Technology 1 $12,881 0% — — — 0 — — — — — 23%

352010 Biotechnology 5 $206,695 2% — — — 0 — — — — — -4%

352020 Pharmaceuticals 12 $814,562 6% — — — 0 — — — — — -10%

352030 Life Sciences Tools & Serv ices 5 $53,306 0% — — — 0 — — — — — 0%

HealthCare 35 52 $1,571,714 12% — — — 0 — — — — — -4%

Financials 401010 Commercial Banks 13 $389,393 3% — — — 0 — — — — — 29%

401020 Thrifts & Mortgage Finance 2 $8,604 0% — — — 0 — — — — — -3%

402010 Diversified Financial Services 9 $414,336 3% — — — 0 — — — — — -48%

402020 Consumer Finance 4 $127,278 1% — — — 1 25% 16% -3% 14% 100% 0% 100% 12%

402030 Capital Markets 14 $272,144 2% — — — 0 — — — — — 2%

403010 Insurance 22 $452,216 3% — — — 0 — — — — — 87%

404020 Real Estate Investment Trusts (REITs)16 $274,864 2% — — — 1 6% 4% Neg — 0% 100% -100% 19%

404030 Real Estate Management & Development1 $6,056 0% — — — 0 — — — — — 39%

Financials 40 81 $1,944,890 15% — — — 2 2% 2% -4% 12% 50% 50% 0% 4%

Technology 451010 Internet Software & Services 5 $288,228 2% — — — 0 — — — — — 11%

451020 IT Services 14 $522,546 4% — — — 2 14% 11% -4% 0% 50% 0% 50% 9%

30



Figure 38: S&P 500 – Capitalization & EPS Statistics for 3Q12E (continued)






# of

Cos

Mkt Cap

($mil)

Mkt Cap

(% )

P/E

(LTM)

(a)

% chg

(NTM vs.

LTM) (b)

(P/E) /

Growth

(a)/(b)

#

Cos

% of

Cos

% of

Mkt

Cap

EPS %

chg yoy

Actual %

chg less


Up less

down %

EPS %

chg yoy

451030 Software 12 $510,960 4% — — — 3 25% 34% 6% 0% 0% 33% -33% -15%

452010 Communications Equipment 7 $237,763 2% — — — 0 — — — — — 3%

452020 Computers & Peripherals 8 $740,176 6% — — — 0 — — — — — 14%

452030 Electronic Equipment Instruments & Components6 $51,719 0% — — — 1 17% 7% -16% -6% 0% 100% -100% -25%

452040 Office Electronics 1 $9,242 0% — — — 0 — — — — — -8%

453010 Semiconductors & Semiconductor Equipment17 $251,084 2% — — — 1 6% 2% Neg — 0% 100% -100% -24%

Technology 45 70 $2,611,719 20% — — — 7 10% 9% 0% -1% 14% 43% -29% 0%

Telecom 501010 Diversified Telecommunication Services5 $378,883 3% — — — 0 — — — — — 7%

501020 Wireless Telecommunication Services 3 $38,514 0% — — — 0 — — — — — Neg

Telecom 50 8 $417,398 3% — — — 0 — — — — — -11%

Utilities 551010 Electric Utilities 13 $267,045 2% — — — 0 — — — — — -6%

551020 Gas Utilities 2 $14,652 0% — — — 0 — — — — — 54%

551030 Multi-Utilities 14 $163,242 1% — — — 0 — — — — — -6%

551050 Independent Power Producers & Energy Traders2 $13,214 0% — — — 0 — — — — — 14%

Utilities 55 31 $458,152 3% — — — 0 — — — — — -5%

Total 500 $13,235,574 100% — — — 30 6% 5% -2% 2% 53% 33% 20% -4%

Total ex-Financials 419 $11,290,684 85% — — — 28 7% 6% -2% 2% 54% 32% 21% -6%

Total ex-Energy 457 $11,793,669 89% — — — 30 7% 6% -2% 2% 53% 33% 20% -1%

31



Figure 39: S&P 500 – Top-Line and Net-Income Statistics for 3Q12E

Source: FactSet and J.P. Morgan calculations. Note: The estimates may differ slightly from Thomson Financial Director Report's estimates due to methodology differences. Percentages correspond to those companies for which both a IBES Mean Estimate and


Net Income Sales

Quarterly Results Cont to Growth Quarterly Results Cont to Growth


Net

Income # Cos

% chg

yoy

% of

ending

Δ Net

Income

Δ NI /

Total Δ NI

% of

growth Sales # Cos

% chg

yoy

% of

ending Δ Sales

Δ Sales /

Total Δ

Sales

% of

growth

Energy 101010 Energy Equipment & Services — 0 — — — — — — 0 — — — — —

101020 Oil Gas & Consumable Fuels — 0 — — — — — — 0 — — — — —

Energy 10 — 0 — — — — — — 0 — — — — —

Materials 151010 Chemicals $194 2 -52% 2% -$213 -92% -2% $4,615 2 -13% 5% -$715 -162% -1%

151020 Construction Materials — 0 — — — — — — 0 — — — — —

151030 Containers & Packaging — 0 — — — — — — 0 — — — — —

151040 Metals & Mining $32 1 -82% 0% -$143 -61% -1% — 0 — — — — —

151050 Paper & Forest Products — 0 — — — — — — 0 — — — — —

Materials 15 $226 3 -61% 2% -$355 -153% -3% $4,615 2 -13% 5% -$715 -162% -1%

Industrials 201010 Aerospace & Defense — 0 — — — — — — 0 — — — — —

201020 Building Products — 0 — — — — — — 0 — — — — —

201030 Construction & Engineering — 0 — — — — — — 0 — — — — —

201040 Electrical Equipment — 0 — — — — — — 0 — — — — —

201050 Industrial Conglomerates — 0 — — — — — — 0 — — — — —

201060 Machinery — 0 — — — — — — 0 — — — — —

201070 Trading Companies & Distributors — 0 — — — — — — 0 — — — — —

202010 Commercial Serv ices & Supplies $76 1 11% 1% $8 3% 0% $1,051 1 3% 1% $34 8% 0%

202020 Professional Serv ices — 0 — — — — — — 0 — — — — —

203010 Air Freight & Logistics $458 1 -1% 4% -$6 -3% 0% $10,792 1 3% 11% $271 61% 0%

203020 Airlines — 0 — — — — — — 0 — — — — —

203040 Road & Rail — 0 — — — — — — 0 — — — — —

Industrials 20 $534 2 0% 5% $1 1% 0% $11,843 2 3% 12% $305 69% 0%

Discretionary 251010 Auto Components — 0 — — — — — — 0 — — — — —

251020 Automobiles — 0 — — — — — — 0 — — — — —

252010 Household Durables $88 1 309% 1% $66 29% 1% $1,100 1 34% 1% $280 63% 0%

252020 Leisure Equipment & Products — 0 — — — — — — 0 — — — — —

252030 Textiles Apparel & Luxury Goods $586 1 -9% 6% -$59 -25% -1% $6,669 1 10% 7% $588 133% 1%

253010 Hotels Restaurants & Leisure $1,922 4 -1% 19% -$23 -10% 0% $9,448 3 -4% 10% -$425 -96% 0%

253020 Diversified Consumer Services — 0 — — — — — — 0 — — — — —

254010 Media — 0 — — — — — — 0 — — — — —

32



Figure 40: S&P 500 – Top-Line and Net-Income Statistics for 3Q12E (continued)



Net Income Sales



Net

Income # Cos

% chg

yoy

% of

ending

Δ Net

Income

Δ NI /

Total Δ NI

% of

growth Sales # Cos

% chg

yoy

% of

ending Δ Sales

Δ Sales /

Total Δ

Sales

% of

growth

255010 Distributors — 0 — — — — — — 0 — — — — —

255020 Internet & Catalog Retail — 0 — — — — — — 0 — — — — —

255030 Multiline Retail $88 1 11% 1% $8 4% 0% $2,364 1 11% 2% $230 52% 0%

255040 Specialty Retail $660 3 2% 6% $16 7% 0% $8,190 3 7% 8% $534 121% 1%

Discretionary 25 $3,343 10 0% 33% $8 4% 0% $27,771 9 5% 29% $1,206 273% 1%

Staples 301010 Food & Staples Retailing $1,085 2 9% 11% $87 37% 1% $17,073 1 -5% 18% -$894 -202% -1%

302010 Beverages $131 1 -20% 1% -$33 -14% 0% $699 1 1% 1% $8 2% 0%

302020 Food Products $727 3 13% 7% $86 37% 1% $8,341 3 6% 9% $467 106% 0%

302030 Tobacco — 0 — — — — — — 0 — — — — —

303010 Household Products — 0 — — — — — — 0 — — — — —

303020 Personal Products — 0 — — — — — — 0 — — — — —

Staples 30 $1,943 6 8% 19% $139 60% 1% $26,112 5 -2% 27% -$418 -95% 0%

HealthCare 351010 Health Care Equipment & Supplies — 0 — — — — — — 0 — — — — —

351020 Health Care Prov iders & Services — 0 — — — — — — 0 — — — — —

351030 Health Care Technology — 0 — — — — — — 0 — — — — —

352010 Biotechnology — 0 — — — — — — 0 — — — — —

352020 Pharmaceuticals — 0 — — — — — — 0 — — — — —

352030 Life Sciences Tools & Services — 0 — — — — — — 0 — — — — —

HealthCare 35 — 0 — — — — — — 0 — — — — —

Financials 401010 Commercial Banks — 0 — — — — — — 0 — — — — —

401020 Thrifts & Mortgage Finance — 0 — — — — — — 0 — — — — —

402010 Diversified Financial Services — 0 — — — — — — 0 — — — — —

402020 Consumer Finance $622 1 -3% 6% -$21 -9% 0% $2,289 1 6% 2% $138 31% 0%

402030 Capital Markets — 0 — — — — — — 0 — — — — —

403010 Insurance — 0 — — — — — — 0 — — — — —

404020 Real Estate Investment Trusts (REITs) -$37 1 Neg 0% -$1 -1% 0% — 0 — — — — —

404030 Real Estate Management & Development— 0 — — — — — — 0 — — — — —

Financials 40 $585 2 -4% 6% -$23 -10% 0% $2,289 1 6% 2% $138 31% 0%

Technology 451010 Internet Software & Services — 0 — — — — — — 0 — — — — —

451020 IT Serv ices $784 2 -4% 8% -$36 -16% 0% $7,866 2 2% 8% $129 29% 0%

33



Figure 41: S&P 500 – Top-Line and Net-Income Statistics for 3Q12E (continued)



Net Income Sales



Net

Income # Cos

% chg

yoy

% of

ending

Δ Net

Income

Δ NI /

Total Δ NI

% of

growth Sales # Cos

% chg

yoy

% of

ending Δ Sales

Δ Sales /

Total Δ

Sales

% of

growth

451030 Software $2,962 3 6% 29% $159 69% 2% $9,584 3 -1% 10% -$84 -19% 0%

452010 Communications Equipment — 0 — — — — — — 0 — — — — —

452020 Computers & Peripherals — 0 — — — — — — 0 — — — — —

452030 Electronic Equipment Instruments & Components$114 1 -16% 1% -$22 -10% 0% $4,338 1 1% 5% $58 13% 0%

452040 Office Electronics — 0 — — — — — — 0 — — — — —

453010 Semiconductors & Semiconductor Equipment-$243 1 Neg -2% -$104 -45% -1% $1,963 1 -8% 2% -$177 -40% 0%

Technology 45 $3,618 7 0% 35% -$3 -1% 0% $23,752 7 0% 25% -$74 -17% 0%

Telecom 501010 Diversified Telecommunication Services — 0 — — — — — — 0 — — — — —

501020 Wireless Telecommunication Services — 0 — — — — — — 0 — — — — —

Telecom 50 — 0 — — — — — — 0 — — — — —

Utilities 551010 Electric Utilities — 0 — — — — — — 0 — — — — —

551020 Gas Utilities — 0 — — — — — — 0 — — — — —

551030 Multi-Utilities — 0 — — — — — — 0 — — — — —

551050 Independent Power Producers & Energy Traders— 0 — — — — — — 0 — — — — —

Utilities 55 — 0 — — — — — — 0 — — — — —

Total $10,248 30 -2% 100% -$232 -100% -2% $96,382 26 0% 100% $442 100% 0%

Total ex-Financials $9,663 28 -2% 94% -$209 -90% -2% $94,093 25 0% 98% $304 69% 0%

Total ex-Energy $10,248 30 -2% 100% -$232 -100% -2% $96,382 26 0% 100% $442 100% 0%

34



Appendix IV: Company Statistics

This section of the report provides key metrics for each company belonging to the S&P 500. The S&P 500 companies are listed according to the industry in which they belong. For each company, we provide pricing information and market cap, theJ.P. Morgan rating if the company is covered, the year-to-date change in its consensus EPS estimate for 3Q12, and its history of upside and downside surprises within the last 18 quarters.

In addition, for those companies that have not reported yet, the tables show their expected reporting date, their IBES consensus EPS estimate, and the EPS reported in the previous year’s quarter. Similarly, for those companies that have reported, we show the actual EPS figures and whether, and by how much, they beat expectations.

35



Figure 42: S&P 500 – Company Statistics

Source: FactSet and J.P. Morgan calculations. The estimated EPS are one month prior to the close of the quarter.

Company Stats Price Performance 3Q12 EPS Analysis Outlook Results (Last 18 Qs)

Industry Ticker Company Name

Reporting

Date

JPM

Rating

Mkt. Cap.

(mm)

Fiscal

Year

Ending

Current

Price

52-Week

High

52-Week

Low

YTD %

Change

3Q11

EPS (a)

3Q12

EPS Est.

(b)

3Q12

Actual

EPS (c )

Actual

Change

in EPS

(c)/(a)

EPS Δ

Rep. vs

Est. (c)-

(b)

YTD %

Change in

NTM

EPS Est

% of

Quarters

Beating

Estimate

% of

Quarters

Missing

Estimate

Energy Equipment & Services BHI Baker Hughes Inc. 10/19/2012 N $19,363 12/31/12 $44.16 $61.90 $37.08 -9% $1.18 $0.84 — — -28% 53% 47%

CAM Cameron International Corp. 10/31/2012 OW $13,193 12/31/12 $53.57 $60.00 $38.38 9% $0.78 $0.88 — — 15% 71% 12%

DO Diamond Offshore Drilling Inc. 10/18/2012 N $9,083 12/31/12 $65.33 $73.50 $52.98 18% $1.85 $1.01 — — 8% 71% 29%

ESV Ensco PLC Cl A 11/1/2012 OW $12,651 12/31/12 $54.69 $61.48 $41.63 17% $0.87 $1.30 — — 14% 47% 47%

FTI FMC Technologies Inc. 10/23/2012 OW $10,310 12/31/12 $43.25 $55.19 $36.89 -17% $0.50 $0.57 — — 11% 53% 35%

HAL Halliburton Co. 10/17/2012 OW $30,922 12/31/12 $33.50 $40.43 $26.28 -3% $0.94 $0.68 — — -20% 53% 24%

HP Helmerich & Payne Inc. 11/15/2012 $5,037 9/28/12 $47.66 $68.60 $38.71 -18% $1.09 $1.24 — — -8% 82% 18%

NBR Nabors Industries Ltd. 10/23/2012 $4,135 12/31/12 $14.24 $22.73 $12.40 -18% $0.44 $0.37 — — -24% 47% 41%

NOV National Oilwell Varco Inc. 10/25/2012 OW $33,385 12/31/12 $78.29 $89.95 $59.07 15% $1.26 $1.51 — — 14% 94% 0%

NE Noble Corp. 10/17/2012 OW $9,005 12/31/12 $35.65 $41.71 $28.73 18% $0.49 $0.51 — — 5% 35% 65%

RDC Rowan Companies PLC 10/31/2012 UW $4,002 12/31/12 $32.22 $39.40 $28.62 6% $0.25 $0.48 — — -9% 41% 59%

SLB Schlumberger Ltd. 10/19/2012 OW $94,325 12/31/12 $71.08 $80.78 $59.12 4% $0.98 $1.07 — — 0% 41% 53%

Oil Gas & Consumable Fuels APC Anadarko Petroleum Corp. 10/29/2012 N $34,123 12/31/12 $68.29 $88.70 $56.42 -11% $0.66 $0.73 — — 18% 59% 41%

APA Apache Corp. 11/1/2012 OW $33,437 12/31/12 $85.47 $112.09 $77.93 -6% $2.95 $2.21 — — -16% 59% 41%

COG Cabot Oil & Gas Corp. 10/25/2012 OW $9,233 12/31/12 $43.97 $47.25 $28.84 16% $0.17 $0.13 — — -35% 53% 35%

CHK Chesapeake Energy Corp. 11/1/2012 UW $12,935 12/31/12 $19.44 $29.87 $13.32 -13% $0.72 $0.09 — — -52% 65% 35%

CVX Chevron Corp. 11/2/2012 N $220,643 12/31/12 $112.45 $118.53 $92.29 6% $3.67 $2.96 — — -3% 65% 35%

COP ConocoPhillips 10/25/2012 OW $69,521 12/31/12 $57.24 $59.68 $49.89 -21% $2.52 $1.17 — — -32% 65% 35%

CNX Consol Energy Inc. 10/29/2012 OW $7,478 12/31/12 $32.85 $46.90 $26.41 -10% $0.72 $0.36 — — -58% 41% 53%

DNR Denbury Resources Inc. 11/2/2012 OW $6,279 12/31/12 $16.05 $21.37 $11.95 6% $0.37 $0.32 — — -5% 59% 41%

DVN Devon Energy Corp. 11/7/2012 OW $24,464 12/31/12 $60.48 $76.34 $54.01 -2% $1.40 $0.69 — — -36% 53% 47%

EOG EOG Resources Inc. 11/5/2012 OW $29,568 12/31/12 $109.50 $119.97 $76.74 11% $0.83 $1.02 — — 16% 53% 41%

EQT EQT Corp. 10/25/2012 OW $8,929 12/31/12 $59.69 $73.10 $43.69 9% $0.45 $0.30 — — -20% 59% 41%

XOM Exxon Mobil Corp. 11/1/2012 N $420,189 12/31/12 $91.03 $93.36 $73.90 7% $2.13 $1.94 — — -3% 53% 47%

HES Hess Corp. 10/31/2012 N $17,972 12/31/12 $52.61 $67.86 $39.67 -7% $1.11 $1.21 — — -6% 53% 47%

KMI Kinder Morgan Inc. 10/22/2012 OW $19,933 12/31/12 $35.16 $40.25 $26.40 9% $0.21 $0.26 — — -1% 20% 80%

MRO Marathon Oil Corp. 11/6/2012 N $20,853 12/31/12 $29.56 $35.49 $22.99 1% $0.91 $0.64 — — -9% 35% 59%

MPC Marathon Petroleum Corp. 11/1/2012 $18,708 12/31/12 $55.30 $60.04 $30.24 66% $3.16 $3.05 — — 50% 75% 25%

MUR Murphy Oil Corp. 10/31/2012 N $11,094 12/31/12 $57.11 $65.60 $43.29 2% $1.73 $1.18 — — 0% 65% 29%

NFX Newfield Exploration Co. 10/23/2012 OW $4,448 12/31/12 $32.95 $47.40 $25.01 -13% $1.04 $0.49 — — -35% 41% 59%

36



Figure 43: S&P 500 – Company Statistics (continued)




Reporting

Date

JPM

Rating

Mkt. Cap.

(mm)

Fiscal

Year

Ending

Current

Price

52-Week

High

52-Week

Low

YTD %

Change

3Q11

EPS (a)

3Q12

EPS Est.

(b)

3Q12

Actual

EPS (c )

Actual

Change

in EPS

(c)/(a)

EPS Δ

Rep. vs

Est. (c)-

(b)

YTD %

Change in

NTM

EPS Est

% of

Quarters

Beating

Estimate

% of

Quarters

Missing

Estimate

NBL Noble Energy Inc. 10/25/2012 OW $16,735 12/31/12 $94.11 $105.46 $76.83 0% $1.24 $1.07 — — -9% 71% 29%

OXY Occidental Petroleum Corp. 10/25/2012 OW $66,594 12/31/12 $82.22 $106.68 $76.59 -12% $2.18 $1.63 — — -11% 59% 41%

BTU Peabody Energy Corp. 10/22/2012 OW $6,448 12/31/12 $24.03 $47.81 $18.78 -27% $0.87 $0.34 — — -62% 59% 35%

PSX Phillips 66 10/31/2012 OW $28,306 12/31/12 $45.15 $48.22 $28.75 #VALUE! $2.10 — — — 100% 0%

PXD Pioneer Natural Resources Co. 10/31/2012 OW $12,619 12/31/12 $102.56 $119.19 $67.76 15% $1.14 $0.93 — — 9% 65% 29%

QEP QEP Resources Inc. 10/30/2012 N $5,657 12/31/12 $31.82 $38.44 $24.35 9% $0.47 $0.34 — — 2% 50% 38%

RRC Range Resources Corp. 10/24/2012 OW $11,416 12/31/12 $70.26 $74.93 $52.34 13% $0.28 $0.17 — — -27% 41% 53%

SWN Southwestern Energy Co. 10/22/2012 OW $12,247 12/31/12 $35.08 $44.36 $25.63 10% $0.50 $0.32 — — -28% 35% 53%

SE Spectra Energy Corp. 11/1/2012 $19,273 12/31/12 $29.52 $32.27 $25.60 -4% $0.38 $0.31 — — -7% 53% 41%

TSO Tesoro Corp. 10/31/2012 OW $5,410 12/31/12 $38.70 $44.73 $20.77 66% $2.39 $2.23 — — 43% 59% 41%

VLO Valero Energy Corp. 10/30/2012 N $16,256 12/31/12 $29.47 $34.36 $19.12 40% $2.11 $1.71 — — 20% 47% 53%

WMB Williams Companies Inc 10/30/2012 OW $22,271 12/31/12 $35.55 $37.56 $20.88 8% $0.40 $0.27 — — -23% 41% 53%

WPX WPX Energy Inc. 11/1/2012 N $3,457 12/31/12 $17.37 $23.42 $13.22 -4% $0.00 — — — 100% 0%

Chemicals APD Air Products & Chemicals Inc. 10/19/2012 N $17,364 9/28/12 $82.02 $92.79 $76.11 -4% $1.51 $1.43 — — 0% 53% 29%

ARG Airgas Inc. 10/23/2012 $6,237 3/29/13 $80.96 $93.05 $66.39 4% $1.03 $1.07 — — 16% 59% 24%

CF CF Industries Holdings Inc. 11/5/2012 OW $13,395 12/31/12 $213.65 $227.99 $128.03 47% $5.16 $5.71 — — 11% 59% 41%

DOW Dow Chemical Co. 10/25/2012 N $33,643 12/31/12 $28.08 $36.08 $24.42 -2% $0.62 $0.37 — — -12% 59% 41%

DD E.I. DuPont de Nemours & Co. 10/23/2012 OW $45,700 12/31/12 $49.12 $57.50 $42.53 7% $0.69 $0.47 — — 1% 82% 18%

EMN Eastman Chemical Co. 10/25/2012 OW $8,493 12/31/12 $55.54 $59.56 $35.08 42% $1.19 $1.42 — — 32% 82% 18%

ECL Ecolab Inc. 10/30/2012 N $18,613 12/31/12 $63.63 $68.96 $50.79 10% $0.75 $0.86 — — 13% 29% 29%

FMC FMC Corp. 10/29/2012 $7,385 12/31/12 $53.78 $59.41 $36.19 25% $0.70 $0.78 — — 19% 82% 12%

IFF International Flavors & Fragrances Inc.11/6/2012 N $4,925 12/31/12 $60.45 $63.78 $51.20 15% $1.00 $1.07 — — 4% 53% 24%

LYB LyondellBasell Industries N.V. Cl A10/26/2012 OW $29,159 12/31/12 $50.70 $53.77 $26.10 56% $1.53 $1.41 — — 26% 86% 14%

MON Monsanto Co. 10/3/2012 OW $47,592 8/30/13 $89.30 $92.20 $67.09 27% -$0.22 -$0.43 -$0.44 - -$0.01 22% 56% 28%

MOS Mosaic Co. 10/2/2012 OW $16,166 5/31/13 $54.45 $62.65 $44.43 8% $1.17 $1.16 $1.01 -14% -$0.15 -12% 33% 67%

PPG PPG Industries Inc. 10/18/2012 OW $17,614 12/31/12 $115.36 $119.86 $74.96 38% $1.96 $2.20 — — 8% 71% 29%

PX Praxair Inc. 10/24/2012 N $30,965 12/31/12 $103.85 $116.93 $93.46 -3% $1.40 $1.40 — — 5% 65% 24%

SHW Sherwin-Williams Co. 10/25/2012 N $15,439 12/31/12 $150.43 $156.50 $76.55 69% $1.71 $2.21 — — 36% 88% 12%

SIAL Sigma-Aldrich Corp. 10/23/2012 N $8,596 12/31/12 $71.18 $74.94 $58.60 14% $0.96 $0.94 — — 3% 76% 12%

Construction Materials VMC Vulcan Materials Co. 10/31/2012 NR $5,944 12/31/12 $45.94 $49.99 $28.65 17% -$0.13 $0.17 — — Neg to Pos 18% 82%

37







Reporting

Date

JPM

Rating

Mkt. Cap.

(mm)

Fiscal

Year

Ending

Current

Price

52-Week

High

52-Week

Low

YTD %

Change

3Q11

EPS (a)

3Q12

EPS Est.

(b)

3Q12

Actual

EPS (c )

Actual

Change

in EPS

(c)/(a)

EPS Δ

Rep. vs

Est. (c)-

(b)

YTD %

Change in

NTM

EPS Est

% of

Quarters

Beating

Estimate

% of

Quarters

Missing

Estimate

Containers & Packaging BLL Ball Corp. 10/25/2012 N $6,429 12/31/12 $41.55 $43.79 $32.81 16% $0.81 $0.88 — — 6% 53% 35%

BMS Bemis Co. Inc. 10/25/2012 N $3,249 12/31/12 $31.46 $33.48 $27.21 5% $0.56 $0.54 — — 2% 65% 35%

OI Owens-Illinois Inc. 10/24/2012 N $3,237 12/31/12 $19.61 $25.46 $15.60 1% $0.84 $0.68 — — 0% 65% 29%

SEE Sealed Air Corp. 10/31/2012 OW $2,990 12/31/12 $15.40 $21.50 $11.51 -11% $0.48 $0.31 — — -30% 35% 47%

Metals & Mining AA Alcoa Inc. 10/9/2012 OW $9,293 12/31/12 $8.71 $11.66 $7.97 1% $0.15 $0.00 $0.03 -80% $0.03 -33% 33% 61%

ATI Allegheny Technologies Inc. 10/24/2012 OW $3,314 12/31/12 $30.92 $53.00 $27.61 -35% $0.63 $0.41 — — -23% 35% 59%

CLF Cliffs Natural Resources Inc. 10/24/2012 N $5,775 12/31/12 $40.53 $78.85 $32.25 -35% $4.07 $1.14 — — -54% 47% 53%

FCX Freeport-McMoRan Copper & Gold Inc.10/22/2012 OW $38,179 12/31/12 $40.22 $48.96 $31.08 9% $1.10 $0.71 — — -3% 59% 41%

NEM Newmont Mining Corp. 11/1/2012 OW $26,945 12/31/12 $54.85 $72.42 $42.95 -9% $1.29 $0.98 — — -21% 41% 53%

NUE Nucor Corp. 10/18/2012 OW $12,336 12/31/12 $38.86 $45.75 $33.66 -2% $0.57 $0.41 — — -5% 29% 71%

TIE Titanium Metals Corp. 10/29/2012 OW $2,129 12/31/12 $12.16 $17.95 $10.42 -19% $0.14 $0.17 — — 0% 35% 53%

X United States Steel Corp. 10/30/2012 N $2,998 12/31/12 $20.78 $32.52 $17.67 -21% $0.72 $0.02 — — -18% 41% 59%

Paper & Forest Products IP International Paper Co. 10/25/2012 N $16,011 12/31/12 $36.61 $37.38 $24.62 24% $0.92 $0.77 — — 13% 82% 18%

MWV MeadWestvaco Corp. 10/23/2012 OW $5,219 12/31/12 $30.06 $31.34 $22.83 0% $0.70 $0.39 — — -15% 71% 24%

Aerospace & Defense BA Boeing Co. 10/24/2012 OW $52,881 12/31/12 $70.34 $77.83 $61.33 -4% $1.46 $1.12 — — 10% 65% 35%

GD General Dynamics Corp. 10/24/2012 OW $22,987 12/31/12 $65.16 $74.54 $60.35 -2% $1.83 $1.78 — — -3% 82% 18%

HON Honeywell International Inc. 10/19/2012 OW $47,021 12/31/12 $60.24 $62.00 $46.34 11% $1.10 $1.14 — — 11% 76% 18%

LLL L-3 Communications Holdings Inc. 10/30/2012 N $6,965 12/31/12 $72.14 $73.94 $59.87 8% $2.24 $1.86 — — -5% 71% 12%

LMT Lockheed Martin Corp. 10/24/2012 N $30,077 12/31/12 $92.71 $94.90 $72.37 15% $1.99 $1.84 — — 6% 88% 12%

NOC Northrop Grumman Corp. 10/24/2012 N $16,862 12/31/12 $68.21 $70.20 $52.69 17% $1.86 $1.69 — — 4% 76% 18%

PCP Precision Castparts Corp. 10/25/2012 OW $23,417 3/29/13 $161.11 $179.47 $150.53 -2% $2.03 $2.35 — — 11% 29% 65%

RTN Raytheon Co. 10/25/2012 OW $18,198 12/31/12 $54.81 $58.68 $41.59 13% $1.43 $1.27 — — 6% 82% 18%

COL Rockwell Collins Inc. 10/26/2012 OW $7,476 9/28/12 $52.59 $61.46 $46.37 -5% $1.13 $1.16 — — -1% 41% 29%

TXT Textron Inc. 10/17/2012 N $7,085 12/31/12 $25.22 $29.18 $16.86 36% $0.45 $0.52 — — 38% 82% 18%

UTX United Technologies Corp. 10/23/2012 OW $69,314 12/31/12 $76.02 $87.50 $70.41 4% $1.47 $1.17 — — 3% 88% 12%

Building Products MAS Masco Corp. 10/29/2012 UW $5,114 12/31/12 $14.32 $16.48 $7.61 37% $0.08 $0.12 — — 67% 41% 47%

Construction & Engineering FLR Fluor Corp. 11/1/2012 OW $9,369 12/31/12 $56.11 $64.67 $44.99 12% $0.78 $0.97 — — 13% 59% 29%

JEC Jacobs Engineering Group Inc. 11/15/2012 N $5,161 9/28/12 $39.78 $48.17 $33.61 -2% $0.74 $0.79 — — 7% 41% 24%

PWR Quanta Services Inc. 10/29/2012 OW $5,007 12/31/12 $23.93 $26.07 $18.15 11% $0.25 $0.36 — — 26% 47% 24%

Electrical Equipment CBE Cooper Industries PLC Cl A 10/19/2012 $11,863 12/31/12 $73.46 $76.55 $49.16 36% $0.98 $1.14 — — 14% 82% 18%

38







Reporting

Date

JPM

Rating

Mkt. Cap.

(mm)

Fiscal

Year

Ending

Current

Price

52-Week

High

52-Week

Low

YTD %

Change

3Q11

EPS (a)

3Q12

EPS Est.

(b)

3Q12

Actual

EPS (c )

Actual

Change

in EPS

(c)/(a)

EPS Δ

Rep. vs

Est. (c)-

(b)

YTD %

Change in

NTM

EPS Est

% of

Quarters

Beating

Estimate

% of

Quarters

Missing

Estimate

EMR Emerson Electric Co. 11/6/2012 N $35,426 9/28/12 $48.29 $53.78 $43.59 4% $0.98 $1.06 — — 0% 41% 47%

ROK Rockwell Automation Inc. 11/5/2012 N $9,765 9/28/12 $69.18 $84.71 $60.57 -6% $1.39 $1.33 — — 1% 71% 29%

ROP Roper Industries Inc. 10/25/2012 N $10,614 12/31/12 $108.52 $111.52 $69.80 25% $1.12 $1.23 — — 18% 65% 12%

Industrial Conglomerates MMM 3M Co. 10/23/2012 N $64,486 12/31/12 $93.28 $95.46 $75.09 14% $1.52 $1.65 — — 8% 71% 18%

DHR Danaher Corp. 10/18/2012 OW $38,474 12/31/12 $55.33 $57.15 $43.00 18% $0.73 $0.79 — — 8% 82% 18%

GE General Electric Co. 10/19/2012 OW $236,835 12/31/12 $22.43 $23.18 $14.68 25% $0.31 $0.36 — — 8% 59% 24%

Machinery CAT Caterpillar Inc. 10/22/2012 OW $54,326 12/31/12 $83.16 $116.95 $77.20 -8% $1.71 $2.24 — — 11% 76% 24%

CMI Cummins Inc. 10/30/2012 N $16,716 12/31/12 $87.79 $129.51 $82.20 0% $2.35 $1.94 — — -4% 65% 35%

DE Deere & Co. 11/21/2012 UW $31,799 10/31/12 $81.19 $89.70 $67.52 5% $1.62 $1.88 — — 5% 71% 29%

DOV Dover Corp. 10/17/2012 N $10,095 12/31/12 $55.22 $67.20 $50.14 -5% $1.21 $1.28 — — 7% 88% 12%

ETN Eaton Corp. 10/31/2012 OW $15,160 12/31/12 $44.86 $53.06 $36.38 3% $1.08 $1.11 — — 5% 71% 29%

FLS Flowserve Corp. 10/29/2012 $6,583 12/31/12 $128.76 $135.57 $79.50 30% $1.92 $2.06 — — 14% 59% 35%

ITW Illinois Tool Works Inc. 10/23/2012 N $27,323 12/31/12 $58.28 $62.09 $42.41 25% $1.00 $1.06 — — 7% 53% 35%

IR Ingersoll-Rand Plc 10/19/2012 NR $13,760 12/31/12 $44.64 $47.71 $26.62 47% $0.81 $0.99 — — 14% 53% 47%

JOY Joy Global Inc. 12/12/2012 N $5,949 10/31/12 $56.19 $96.00 $47.69 -25% $1.83 $1.91 — — -8% 82% 18%

PCAR Paccar Inc. 10/25/2012 N $14,133 12/31/12 $39.98 $48.22 $35.21 7% $0.77 $0.66 — — 3% 59% 35%

PLL Pall Corp. 12/3/2012 N $7,230 7/31/13 $63.18 $65.82 $46.33 11% $0.74 $0.70 — — -2% 63% 38%

PH Parker-Hannifin Corp 10/19/2012 N $11,825 6/28/13 $79.24 $91.47 $67.51 4% $1.91 $1.73 — — 0% 71% 24%

PNR Pentair Ltd. 10/30/2012 $4,323 12/31/12 $43.58 $48.77 $32.50 31% $0.58 $0.63 — — 16% 65% 18%

SNA Snap-On Inc. 10/18/2012 $4,164 12/31/12 $71.59 $74.27 $46.33 41% $1.16 $1.23 — — 13% 76% 24%

SWK Stanley Black & Decker Inc. 10/17/2012 N $12,089 12/31/12 $71.90 $81.90 $54.83 6% $1.34 $1.45 — — 5% 65% 35%

XYL Xylem Inc. 11/1/2012 $4,558 12/31/12 $24.56 $28.87 $22.43 -4% $0.55 $0.43 — — -1% 0% 100%

Trading Companies & DistributorsFAST Fastenal Co. 10/11/2012 $12,533 12/31/12 $42.32 $55.05 $32.26 -3% $0.33 $0.37 — — 16% 47% 24%

GWW W.W. Grainger Inc. 10/16/2012 $14,606 12/31/12 $209.57 $221.84 $152.31 12% $2.51 $2.89 — — 16% 94% 6%

Commercial Services & SuppliesADT ADT Corporation $8,522 9/28/12 $37.06 $41.00 $34.68 #VALUE! $0.41 — — — — —

AVY Avery Dennison Corp. 10/24/2012 NR $3,097 12/31/12 $29.88 $32.78 $23.98 4% $0.48 $0.45 — — -14% 59% 35%

CTAS Cintas Corp. 9/20/2012 OW $5,251 5/31/13 $41.97 $42.75 $27.62 21% $0.52 $0.59 $0.60 15% $0.01 22% 56% 28%

RRD R.R. Donnelley & Sons Co. 10/29/2012 $1,941 12/31/12 $10.77 $16.75 $9.95 -25% $0.51 $0.44 — — -7% 59% 29%

IRM Iron Mountain Inc. 10/23/2012 NR $5,896 12/31/12 $34.35 $35.09 $27.10 12% $0.37 $0.36 — — 9% 65% 6%

PBI Pitney Bowes Inc. 10/30/2012 $2,689 12/31/12 $13.40 $21.20 $12.64 -28% $0.69 $0.48 — — -10% 59% 24%

39







Reporting

Date

JPM

Rating

Mkt. Cap.

(mm)

Fiscal

Year

Ending

Current

Price

52-Week

High

52-Week

Low

YTD %

Change

3Q11

EPS (a)

3Q12

EPS Est.

(b)

3Q12

Actual

EPS (c )

Actual

Change

in EPS

(c)/(a)

EPS Δ

Rep. vs

Est. (c)-

(b)

YTD %

Change in

NTM

EPS Est

% of

Quarters

Beating

Estimate

% of

Quarters

Missing

Estimate

RSG Republic Services Inc. 11/1/2012 N $10,067 12/31/12 $27.56 $31.32 $25.15 0% $0.53 $0.49 — — 0% 59% 29%

SRCL Stericycle Inc. 10/24/2012 OW $7,705 12/31/12 $89.96 $94.71 $75.75 15% $0.71 $0.82 — — 12% 88% 0%

TYC Tyco International Ltd. 11/12/2012 N $12,987 9/28/12 $28.11 $29.26 $21.02 -40% $0.92 $0.32 — — -49% 100% 0%

WM Waste Management Inc. 10/30/2012 UW $14,834 12/31/12 $32.00 $36.35 $29.77 -2% $0.63 $0.61 — — 0% 35% 53%

Professional Services DNB Dun & Bradstreet Corp. 10/23/2012 UW $3,643 12/31/12 $81.16 $86.52 $61.61 8% $1.42 $1.61 — — 11% 59% 18%

EFX Equifax Inc. 10/24/2012 OW $5,851 12/31/12 $48.81 $49.49 $31.63 26% $0.65 $0.73 — — 15% 76% 0%

RHI Robert Half International Inc. 10/22/2012 OW $3,598 12/31/12 $25.37 $32.32 $23.45 -11% $0.31 $0.39 — — 21% 65% 29%

Air Freight & Logistics CHRW C.H. Robinson Worldwide Inc. 10/23/2012 N $9,527 12/31/12 $59.00 $76.76 $50.81 -15% $0.70 $0.73 — — 2% 41% 47%

EXPD Expeditors International of Washington Inc.11/6/2012 N $7,234 12/31/12 $34.36 $47.73 $34.20 -16% $0.50 $0.44 — — -8% 41% 53%

FDX FedEx Corp. 9/18/2012 OW $28,265 5/31/13 $89.99 $97.19 $72.01 8% $1.46 $1.57 $1.45 -1% -$0.12 2% 67% 33%

UPS United Parcel Service Inc. Cl B 10/23/2012 OW $52,485 12/31/12 $72.26 $81.79 $66.46 -1% $1.06 $1.07 — — 6% 59% 29%

Airlines LUV Southwest Airlines Co. 10/18/2012 N $6,517 12/31/12 $8.77 $10.05 $7.37 2% $0.15 $0.13 — — 10% 65% 35%

Road & Rail CSX CSX Corp. 10/16/2012 N $21,933 12/31/12 $21.09 $23.71 $19.87 0% $0.43 $0.43 — — 3% 71% 24%

NSC Norfolk Southern Corp. 10/23/2012 N $22,565 12/31/12 $66.40 $78.50 $62.82 -9% $1.59 $1.23 — — 1% 71% 29%

R Ryder System Inc. 10/23/2012 $2,145 12/31/12 $41.96 $57.63 $32.76 -21% $1.09 $1.18 — — 5% 65% 24%

UNP Union Pacific Corp. 10/18/2012 OW $57,273 12/31/12 $120.93 $129.27 $88.83 14% $1.85 $2.18 — — 19% 71% 24%

Auto Components BWA BorgWarner Inc. 10/31/2012 OW $7,646 12/31/12 $66.81 $87.45 $60.17 5% $1.15 $1.19 — — 8% 71% 29%

GT Goodyear Tire & Rubber Co. 10/22/2012 $3,018 12/31/12 $12.33 $15.80 $9.24 -13% $0.72 $0.58 — — -6% 65% 35%

JCI Johnson Controls Inc. 10/22/2012 N $17,830 9/28/12 $26.07 $35.95 $23.37 -17% $0.75 $0.75 — — -6% 47% 41%

Automobiles F Ford Motor Co. 10/26/2012 OW $37,356 12/31/12 $9.98 $13.05 $8.82 -7% $0.46 $0.28 — — -10% 53% 41%

HOG Harley-Davidson Inc. 10/23/2012 N $9,549 12/31/12 $41.90 $54.32 $33.70 8% $0.78 $0.59 — — 18% 35% 59%

Household Durables DHI D.R. Horton Inc. 11/12/2012 N $6,619 9/28/12 $20.73 $22.79 $9.34 64% $0.11 $0.28 — — 81% 53% 47%

HAR Harman International Industries Inc. 11/1/2012 OW $2,907 6/28/13 $43.28 $52.75 $31.18 14% $0.69 $0.79 — — 24% 65% 35%

LEG Leggett & Platt Inc. 10/29/2012 $3,497 12/31/12 $24.87 $25.30 $19.26 8% $0.31 $0.38 — — 12% 41% 53%

LEN Lennar Corp. Cl A 9/24/2012 OW $5,869 11/30/12 $36.78 $38.27 $14.36 87% $0.11 $0.28 $0.40 264% $0.12 112% 56% 39%

NWL Newell Rubbermaid Inc. 10/22/2012 OW $5,658 12/31/12 $19.59 $19.74 $12.31 21% $0.45 $0.44 — — 6% 76% 12%

PHM PulteGroup Inc. 10/25/2012 OW $6,098 12/31/12 $15.89 $17.47 $3.94 152% -$0.34 $0.20 — — 316% 47% 53%

WHR Whirlpool Corp. 10/23/2012 N $6,522 12/31/12 $84.10 $87.54 $45.22 77% $2.35 $1.60 — — 26% 59% 41%

Leisure Equipment & Products HAS Hasbro Inc. 10/22/2012 $4,860 12/31/12 $37.32 $39.98 $31.51 17% $1.27 $1.20 — — -9% 47% 53%

MAT Mattel Inc. 10/16/2012 $11,994 12/31/12 $35.18 $36.25 $26.28 27% $0.86 $0.99 — — 13% 47% 41%

40







Reporting

Date

JPM

Rating

Mkt. Cap.

(mm)

Fiscal

Year

Ending

Current

Price

52-Week

High

52-Week

Low

YTD %

Change

3Q11

EPS (a)

3Q12

EPS Est.

(b)

3Q12

Actual

EPS (c )

Actual

Change

in EPS

(c)/(a)

EPS Δ

Rep. vs

Est. (c)-

(b)

YTD %

Change in

NTM

EPS Est

% of

Quarters

Beating

Estimate

% of

Quarters

Missing

Estimate

Textiles Apparel & Luxury GoodsCOH Coach Inc. 10/22/2012 OW $15,046 6/28/13 $53.00 $79.70 $48.24 -13% $0.73 $0.76 — — 9% 82% 6%

FOSL Fossil Inc. 11/6/2012 N $5,014 12/31/12 $82.41 $139.20 $62.77 4% $1.09 $1.16 — — 8% 88% 6%

NKE Nike Inc. Cl B 9/27/2012 $33,981 5/31/13 $94.22 $114.81 $85.10 -2% $1.36 $1.12 $1.27 -7% $0.15 1% 89% 11%

RL Ralph Lauren Corporation 10/31/2012 N $9,409 3/29/13 $155.98 $182.48 $134.29 13% $2.46 $2.14 — — 9% 94% 6%

VFC VF Corp. 10/22/2012 OW $17,538 12/31/12 $159.58 $164.35 $125.55 26% $2.87 $3.49 — — 13% 76% 24%

Hotels Restaurants & Leisure CCL Carnival Corp. 9/25/2012 N $21,776 11/30/12 $36.63 $39.00 $29.15 12% $1.69 $1.44 $1.53 -9% $0.09 -15% 83% 6%

CMG Chipotle Mex ican Grill Inc. 10/18/2012 N $9,081 12/31/12 $286.62 $442.40 $277.26 -15% $1.90 $2.30 — — 23% 82% 18%

DRI Darden Restaurants Inc. 9/21/2012 N $7,032 5/31/13 $54.68 $57.93 $41.65 20% $0.78 $0.84 $0.86 10% $0.02 6% 61% 28%

IGT International Game Technology 11/12/2012 N $3,398 9/28/12 $12.72 $18.17 $10.92 -26% $0.24 $0.32 — — 3% 47% 47%

MAR Marriott International Inc. 10/3/2012 N $12,110 12/31/12 $38.38 $41.84 $27.01 32% $0.29 $0.40 $0.44 52% $0.04 23% 61% 17%

MCD McDonald's Corp. 10/19/2012 OW $93,179 12/31/12 $92.40 $102.22 $85.92 -8% $1.45 $1.48 — — 3% 71% 18%

SBUX Starbucks Corp. 11/1/2012 OW $35,682 9/28/12 $46.95 $62.00 $39.72 2% $0.37 $0.45 — — 13% 65% 24%

HOT Starwood Hotels & Resorts Worldwide Inc.10/25/2012 OW $11,065 12/31/12 $56.32 $61.09 $41.93 17% $0.42 $0.53 — — 19% 100% 0%

WYN Wyndham Worldwide Corp. 10/24/2012 OW $7,586 12/31/12 $53.35 $55.34 $29.56 41% $0.94 $1.10 — — 23% 100% 0%

WYNN Wynn Resorts Ltd. 10/15/2012 OW $11,160 12/31/12 $111.02 $142.20 $90.11 0% $1.05 $1.33 — — -1% 53% 47%

YUM Yum! Brands Inc. 10/9/2012 OW $32,361 12/31/12 $70.99 $74.44 $49.72 20% $0.83 $0.97 $0.99 19% $0.02 14% 83% 11%

Diversified Consumer Services APOL Apollo Group Inc. Cl A 10/16/2012 OW $3,172 8/31/12 $28.10 $58.29 $25.77 -48% $1.02 $0.49 — — -10% 94% 6%

HRB H&R Block Inc. 11/26/2012 $4,519 4/30/13 $16.67 $18.04 $14.02 2% -$0.38 -$0.40 — — 5% 41% 59%

Media CVC Cablevision Systems Corp. 10/22/2012 UW $3,547 12/31/12 $16.71 $18.25 $10.76 18% $0.14 $0.17 — — -27% 18% 76%

CBS CBS Corp (Cl B) 11/7/2012 OW $20,656 12/31/12 $34.61 $38.32 $22.05 28% $0.50 $0.61 — — 26% 65% 35%

CMCSA Comcast Corp. Cl A 10/26/2012 OW $74,358 12/31/12 $35.16 $36.98 $20.90 48% $0.33 $0.47 — — 16% 82% 18%

DTV DIRECTV 11/5/2012 N $33,215 12/31/12 $50.71 $55.17 $41.45 19% $0.70 $0.93 — — 14% 47% 53%

DISCA Discov ery Communications Inc. Series A11/6/2012 N $8,738 12/31/12 $59.91 $61.56 $38.56 46% $0.59 $0.63 — — 15% 65% 29%

DIS Walt Disney Co. 11/8/2012 OW $91,885 9/28/12 $51.21 $53.40 $32.24 37% $0.59 $0.69 — — 18% 65% 35%

GCI Gannett Co. Inc. 10/15/2012 N $4,101 12/31/12 $17.72 $19.99 $9.82 33% $0.44 $0.53 — — 1% 53% 35%

IPG Interpublic Group Of Cos. 10/26/2012 OW $4,931 12/31/12 $11.28 $12.17 $7.35 16% $0.16 $0.17 — — 23% 53% 41%

MHP McGraw-Hill Cos. 10/31/2012 $15,447 12/31/12 $55.13 $55.94 $40.50 23% $1.21 $1.29 — — 17% 82% 18%

NWSA News Corp. Cl A 11/6/2012 $38,108 6/28/13 $24.34 $25.45 $15.93 36% $0.32 $0.38 — — 15% 53% 41%

OMC Omnicom Group Inc. 10/16/2012 OW $13,746 12/31/12 $51.75 $54.76 $39.50 16% $0.72 $0.73 — — 9% 47% 24%

SNI Scripps Networks Interactive Inc. Cl A10/29/2012 N $7,237 12/31/12 $63.11 $64.38 $37.02 49% $0.66 $0.75 — — 16% 69% 6%

41







Reporting

Date

JPM

Rating

Mkt. Cap.

(mm)

Fiscal

Year

Ending

Current

Price

52-Week

High

52-Week

Low

YTD %

Change

3Q11

EPS (a)

3Q12

EPS Est.

(b)

3Q12

Actual

EPS (c )

Actual

Change

in EPS

(c)/(a)

EPS Δ

Rep. vs

Est. (c)-

(b)

YTD %

Change in

NTM

EPS Est

% of

Quarters

Beating

Estimate

% of

Quarters

Missing

Estimate

TWC Time Warner Cable Inc. 10/31/2012 N $29,871 12/31/12 $97.50 $100.17 $57.15 53% $1.08 $1.49 — — 25% 65% 35%

TWX Time Warner Inc. 11/7/2012 OW $43,024 12/31/12 $45.34 $46.59 $31.26 25% $0.79 $0.82 — — 13% 65% 29%

VIAB Viacom Inc. Cl B 11/15/2012 OW $25,313 9/28/12 $54.62 $56.91 $39.86 20% $1.06 $1.17 — — 8% 69% 31%

WPO Washington Post Co. Cl B 11/2/2012 $2,229 12/31/12 $358.05 $405.00 $322.50 -5% $4.95 $1.31 — — 4% 64% 36%

Distributors GPC Genuine Parts Co. 10/18/2012 N $9,511 12/31/12 $61.32 $66.50 $52.71 0% $0.97 $1.12 — — 10% 88% 6%

Internet & Catalog Retail AMZN Amazon.com Inc. 10/22/2012 OW $110,751 12/31/12 $244.99 $264.11 $166.97 42% $0.14 -$0.08 — — 4% 71% 24%

EXPE Expedia Inc. 10/25/2012 N $6,796 12/31/12 $55.28 $60.29 $23.93 90% $1.54 $1.26 — — -22% 71% 29%

NFLX Netflix Inc. 10/23/2012 N $3,637 12/31/12 $65.50 $133.43 $52.81 -5% $1.16 $0.04 — — 1405% 94% 6%

PCLN priceline.com Inc. 11/5/2012 OW $30,015 12/31/12 $602.41 $774.96 $438.76 29% $9.95 $11.81 — — 18% 100% 0%

TRIP TripAdv isor Inc. 10/30/2012 N $4,174 12/31/12 $32.22 $47.81 $23.99 28% $0.42 — — 5% 50% 0%

Multiline Retail BIG Big Lots Inc. 11/26/2012 UW $1,810 1/31/13 $30.38 $47.22 $29.08 -20% $0.06 -$0.24 — — -6% 53% 47%

DLTR Dollar Tree Inc. 11/15/2012 OW $10,805 1/31/13 $46.91 $56.82 $36.04 13% $0.44 $0.51 — — 19% 100% 0%

FDO Family Dollar Stores Inc. 10/3/2012 OW $7,947 8/30/13 $68.00 $74.73 $53.03 18% $0.66 $0.75 $0.75 14% $0.00 14% 78% 11%

KSS Kohl's Corp. 11/8/2012 N $11,758 1/31/13 $50.14 $56.66 $42.72 2% $0.80 $0.86 — — -3% 65% 24%

M Macy's Inc. 11/7/2012 OW $15,698 1/31/13 $39.00 $42.17 $27.08 21% $0.32 $0.28 — — 17% 88% 12%

JWN Nordstrom Inc. 11/8/2012 N $11,109 1/31/13 $55.27 $58.44 $44.22 11% $0.59 $0.71 — — 9% 76% 24%

JCP J.C. Penney Co. Inc. 11/7/2012 OW $5,291 1/31/13 $24.15 $43.18 $19.06 -31% $0.11 -$0.05 — — -42% 41% 53%

TGT Target Corp. 11/15/2012 N $41,035 1/31/13 $62.66 $65.80 $47.25 22% $0.82 $0.77 — — 10% 65% 35%

Specialty Retail ANF Abercrombie & Fitch Co. Cl A 11/14/2012 N $2,760 1/31/13 $33.43 $77.49 $28.64 -32% $0.57 $0.61 — — -29% 47% 53%

AN AutoNation Inc. 10/25/2012 $5,620 12/31/12 $46.56 $48.12 $31.57 26% $0.48 $0.67 — — 29% 71% 24%

AZO AutoZone Inc. 9/19/2012 OW $13,973 8/30/13 $377.35 $399.10 $313.11 16% $7.18 $8.42 $8.46 18% $0.04 16% 94% 6%

BBBY Bed Bath & Beyond Inc. 9/19/2012 N $14,080 2/28/13 $61.43 $75.84 $56.72 6% $0.93 $1.02 $0.98 5% -$0.04 16% 83% 11%

BBY Best Buy Co. Inc. 11/20/2012 NR $5,993 2/28/13 $17.80 $28.53 $16.25 -24% $0.47 $0.36 — — -18% 25% 69%

KMX CarMax Inc. 9/20/2012 $7,171 2/28/13 $31.34 $35.17 $24.83 3% $0.49 $0.51 $0.48 -2% -$0.03 0% 61% 39%

GME GameStop Corp. Cl A 11/12/2012 $2,834 1/31/13 $22.96 $26.66 $15.32 -5% $0.39 $0.33 — — 7% 29% 65%

GPS Gap Inc. 11/15/2012 N $17,612 1/31/13 $36.62 $37.85 $17.03 97% $0.38 $0.54 — — 36% 82% 18%

HD Home Depot Inc. 11/13/2012 OW $90,055 1/31/13 $59.74 $63.20 $34.05 42% $0.60 $0.70 — — 21% 94% 0%

LTD Limited Brands Inc. 11/14/2012 OW $13,994 1/31/13 $48.69 $52.20 $37.57 21% $0.25 $0.21 — — 11% 76% 18%

LOW Lowe's Cos. 11/19/2012 N $35,232 1/31/13 $30.89 $32.29 $20.24 22% $0.35 $0.35 — — 10% 59% 24%

ORLY O'Reilly Automotive Inc. 10/24/2012 N $10,066 12/31/12 $84.67 $107.13 $67.77 6% $1.10 $1.27 — — 20% 82% 12%

42







Reporting

Date

JPM

Rating

Mkt. Cap.

(mm)

Fiscal

Year

Ending

Current

Price

52-Week

High

52-Week

Low

YTD %

Change

3Q11

EPS (a)

3Q12

EPS Est.

(b)

3Q12

Actual

EPS (c )

Actual

Change

in EPS

(c)/(a)

EPS Δ

Rep. vs

Est. (c)-

(b)

YTD %

Change in

NTM

EPS Est

% of

Quarters

Beating

Estimate

% of

Quarters

Missing

Estimate

PETM PetSmart Inc. 11/12/2012 N $7,591 1/31/13 $70.17 $72.75 $41.92 37% $0.50 $0.63 — — 25% 88% 6%

ROST Ross Stores Inc. 11/15/2012 N $14,372 1/31/13 $64.18 $70.82 $41.18 35% $0.63 $0.72 — — 22% 94% 0%

SPLS Staples Inc. 11/14/2012 OW $7,820 1/31/13 $11.46 $16.93 $10.57 -17% $0.47 $0.45 — — -5% 18% 53%

TIF Tiffany & Co. 11/29/2012 N $7,790 1/31/13 $61.51 $80.99 $49.72 -7% $0.70 $0.63 — — -4% 71% 29%

TJX TJX Cos. 11/13/2012 N $32,948 1/31/13 $44.76 $46.67 $28.14 39% $0.53 $0.61 — — 22% 65% 18%

URBN Urban Outfitters Inc. 11/19/2012 OW $5,363 1/31/13 $36.85 $40.65 $22.27 34% $0.33 $0.41 — — 16% 59% 41%

Food & Staples Retailing COST Costco Wholesale Corp. 10/10/2012 OW $43,908 8/30/13 $101.56 $104.43 $78.81 22% $1.08 $1.31 $1.39 29% $0.08 13% 61% 28%

CVS CVS Caremark Corp. 11/6/2012 OW $61,144 12/31/12 $48.06 $49.23 $34.05 18% $0.70 $0.84 — — 16% 71% 6%

KR Kroger Co. 11/29/2012 N $12,293 1/31/13 $23.30 $24.83 $20.98 -4% $0.33 $0.43 — — 15% 59% 18%

SWY Safeway Inc. 10/11/2012 N $3,901 12/31/12 $16.29 $23.16 $14.73 -23% $0.38 $0.42 — — 13% 41% 35%

SYY Sysco Corp. 11/7/2012 N $18,292 6/28/13 $31.16 $31.90 $25.85 6% $0.51 $0.50 — — 0% 41% 35%

WMT Wal-Mart Stores Inc. 11/15/2012 OW $253,520 1/31/13 $75.42 $76.81 $54.19 26% $0.97 $1.07 — — 8% 71% 12%

WAG Walgreen Co. 9/28/2012 N $33,558 8/30/13 $35.63 $37.35 $28.53 8% $0.57 $0.56 $0.53 -7% -$0.03 19% 44% 56%

WFM Whole Foods Market Inc. 11/7/2012 OW $17,988 9/28/12 $97.41 $101.87 $62.77 40% $0.42 $0.60 — — 26% 88% 12%

Beverages BEAM Beam Inc 10/31/2012 N $9,076 12/31/12 $57.31 $64.00 $46.30 12% $0.53 $0.55 — — 12% 65% 35%

BF.B Brown-Forman Corp. Cl B 12/5/2012 $8,389 4/30/13 $65.10 $67.91 $47.91 21% $0.73 $0.77 — — 8% 41% 53%

KO Coca-Cola Co. 10/16/2012 N $171,478 12/31/12 $38.09 $40.67 $32.37 9% $0.52 $0.50 — — 4% 59% 24%

CCE Coca-Cola Enterprises Inc. 10/25/2012 N $9,286 12/31/12 $31.53 $32.29 $24.20 22% $0.72 $0.68 — — 4% 71% 24%

STZ Constellation Brands Inc. Cl A 10/5/2012 N $5,420 2/28/13 $35.32 $36.50 $17.95 71% $0.77 $0.54 $0.71 -8% $0.17 16% 83% 11%

DPS Dr Pepper Snapple Group Inc. 10/24/2012 N $9,102 12/31/12 $43.23 $45.85 $34.65 9% $0.71 $0.77 — — 8% 59% 24%

TAP Molson Coors Brewing Co. Cl B 11/7/2012 N $6,898 12/31/12 $44.17 $46.35 $37.96 1% $1.14 $1.35 — — 11% 47% 53%

MNST Monster Beverage Corp. 11/5/2012 N $9,462 12/31/12 $53.63 $83.96 $40.88 16% $0.44 $0.56 — — 29% 47% 47%

PEP PepsiCo Inc. 10/17/2012 OW $109,391 12/31/12 $70.29 $73.66 $60.51 6% $1.31 $1.16 — — -6% 59% 18%

Food Products ADM Archer Daniels Midland Co. 10/30/2012 $18,501 6/28/13 $28.09 $33.98 $25.02 -2% $0.69 $0.43 — — — 53% 47%

CPB Campbell Soup Co. 11/20/2012 UW $10,974 7/31/13 $35.00 $36.28 $31.22 5% $0.82 $0.85 — — 6% 65% 35%

CAG ConAgra Foods Inc. 9/20/2012 OW $11,362 5/31/13 $27.88 $28.03 $23.64 6% $0.29 $0.36 $0.44 52% $0.08 11% 56% 33%

DF Dean Foods Co. 11/5/2012 NR $2,769 12/31/12 $14.98 $17.50 $9.16 34% $0.18 $0.28 — — 45% 76% 24%

GIS General Mills Inc. 9/19/2012 N $25,538 5/31/13 $39.58 $41.06 $36.75 -2% $0.64 $0.63 $0.66 3% $0.03 1% 61% 22%

HNZ H.J. Heinz Co. 11/20/2012 N $18,093 4/30/13 $56.50 $58.31 $49.75 5% $0.81 $0.88 — — 3% 53% 47%

HSY Hershey Co. 10/25/2012 OW $11,717 12/31/12 $70.71 $73.42 $55.32 14% $0.84 $0.86 — — 13% 71% 6%

43







Reporting

Date

JPM

Rating

Mkt. Cap.

(mm)

Fiscal

Year

Ending

Current

Price

52-Week

High

52-Week

Low

YTD %

Change

3Q11

EPS (a)

3Q12

EPS Est.

(b)

3Q12

Actual

EPS (c )

Actual

Change

in EPS

(c)/(a)

EPS Δ

Rep. vs

Est. (c)-

(b)

YTD %

Change in

NTM

EPS Est

% of

Quarters

Beating

Estimate

% of

Quarters

Missing

Estimate

HRL Hormel Foods Corp. 11/20/2012 $7,631 10/31/12 $29.03 $30.70 $27.28 -1% $0.43 $0.50 — — 6% 76% 12%

K Kellogg Co. 11/1/2012 N $18,398 12/31/12 $51.43 $55.30 $46.33 2% $0.80 $0.80 — — 0% 47% 41%

KRFT Kraft Foods Group Inc. 11/1/2012 N $27,416 12/31/12 $46.35 $48.00 $42.00 #VALUE! $0.69 — — — — —

MKC McCormick & Co. Inc. 9/27/2012 N $7,432 11/30/12 $61.87 $63.91 $46.28 23% $0.69 $0.76 $0.78 13% $0.02 7% 83% 11%

MJN Mead Johnson Nutrition Co. 10/25/2012 OW $14,482 12/31/12 $71.07 $88.72 $60.62 3% $0.78 $0.72 — — 7% 85% 8%

MDLZ Mondelez International Inc. Cl A 10/29/2012 OW $48,359 12/31/12 $27.25 $28.48 $22.07 -27% $0.58 $0.37 — — -36% 71% 18%

SJM J.M. Smucker Co. 11/16/2012 OW $9,153 4/30/13 $83.62 $87.81 $70.50 7% $1.36 $1.44 — — 1% 82% 18%

TSN Tyson Foods Inc. Cl A 11/19/2012 N $4,688 9/28/12 $16.06 $21.06 $14.07 -22% $0.26 $0.44 — — -26% 65% 35%

Tobacco MO Altria Group Inc. 10/25/2012 OW $67,775 12/31/12 $33.34 $36.29 $26.80 12% $0.56 $0.58 — — 7% 47% 12%

LO Lorillard Inc. 10/24/2012 N $15,004 12/31/12 $114.87 $141.07 $106.46 1% $1.94 $2.24 — — 8% 59% 35%

PM Philip Morris International Inc. 10/18/2012 N $153,030 12/31/12 $90.78 $94.13 $65.08 16% $1.37 $1.39 — — 8% 82% 12%

RAI Reynolds American Inc. 10/23/2012 OW $24,116 12/31/12 $42.65 $46.93 $37.68 3% $0.70 $0.79 — — 5% 65% 29%

Household Products CLX Clorox Co. 10/31/2012 N $9,636 6/28/13 $73.98 $74.97 $63.06 11% $0.98 $0.95 — — 4% 65% 29%

CL Colgate-Palmolive Co. 10/25/2012 N $51,063 12/31/12 $107.69 $109.84 $86.19 17% $1.31 $1.38 — — 5% 59% 12%

KMB Kimberly-Clark Corp. 10/24/2012 N $33,957 12/31/12 $85.99 $88.25 $68.27 17% $1.26 $1.32 — — 5% 47% 47%

PG Procter & Gamble Co. 10/25/2012 OW $187,886 6/28/13 $68.14 $69.97 $59.07 2% $1.03 $0.96 — — -8% 71% 18%

Personal Products AVP Avon Products Inc. 10/25/2012 $7,410 12/31/12 $17.15 $23.94 $14.45 -2% $0.38 $0.22 — — -47% 35% 53%

EL Estee Lauder Cos. Cl A 11/1/2012 N $14,827 6/28/13 $62.38 $65.60 $46.26 11% $0.71 $0.77 — — 11% 82% 12%

Health Care Equipment & SuppliesBCR C.R. Bard Inc. 10/23/2012 N $8,568 12/31/12 $102.21 $108.31 $80.80 20% $1.62 $1.63 — — 1% 82% 6%

BAX Baxter International Inc. 10/18/2012 OW $33,299 12/31/12 $60.85 $61.98 $47.55 23% $1.09 $1.14 — — 3% 82% 0%

BDX Becton Dickinson & Co. 11/7/2012 UW $15,246 9/28/12 $76.40 $80.56 $70.05 2% $1.39 $1.40 — — -1% 71% 18%

BSX Boston Scientific Corp. 10/18/2012 N $7,904 12/31/12 $5.57 $6.41 $4.79 4% $0.10 $0.11 — — -9% 53% 29%

CFN CareFusion Corp. 11/5/2012 OW $6,271 6/28/13 $27.90 $28.99 $22.55 10% $0.33 $0.43 — — 13% 55% 27%

COV Cov idien PLC 11/9/2012 OW $27,634 9/28/12 $57.56 $60.81 $41.69 28% $1.08 $1.00 — — 2% 88% 12%

XRAY Dentsply International Inc. 10/25/2012 $5,196 12/31/12 $36.65 $41.38 $31.57 5% $0.46 $0.50 — — 5% 47% 41%

EW Edwards Lifesciences Corp. 10/19/2012 N $10,161 12/31/12 $87.81 $110.79 $61.59 24% $0.38 $0.57 — — 14% 65% 12%

ISRG Intuitive Surgical Inc. 10/16/2012 N $19,753 12/31/12 $494.63 $594.89 $369.28 7% $3.05 $3.50 — — 20% 88% 12%

MDT Medtronic Inc. 11/20/2012 N $43,407 4/30/13 $42.55 $44.79 $32.26 11% $0.84 $0.88 — — 3% 47% 47%

STJ St. Jude Medical Inc. 10/17/2012 OW $13,315 12/31/12 $42.41 $44.80 $32.13 24% $0.78 $0.81 — — 1% 71% 12%

SYK Stryker Corp. 10/17/2012 OW $19,867 12/31/12 $52.22 $57.15 $45.45 5% $0.91 $0.98 — — 7% 41% 24%

44







Reporting

Date

JPM

Rating

Mkt. Cap.

(mm)

Fiscal

Year

Ending

Current

Price

52-Week

High

52-Week

Low

YTD %

Change

3Q11

EPS (a)

3Q12

EPS Est.

(b)

3Q12

Actual

EPS (c )

Actual

Change

in EPS

(c)/(a)

EPS Δ

Rep. vs

Est. (c)-

(b)

YTD %

Change in

NTM

EPS Est

% of

Quarters

Beating

Estimate

% of

Quarters

Missing

Estimate

VAR Varian Medical Systems Inc. 10/25/2012 OW $6,450 9/28/12 $58.26 $71.95 $52.90 -13% $0.95 $1.03 — — 1% 76% 18%

ZMH Zimmer Holdings Inc. 10/25/2012 N $10,938 12/31/12 $62.61 $69.00 $47.00 17% $1.04 $1.13 — — 8% 76% 0%

Health Care Providers & ServicesAET Aetna Inc. 10/25/2012 N $14,003 12/31/12 $41.89 $51.14 $34.58 -1% $1.40 $1.34 — — 9% 71% 18%

ABC AmerisourceBergen Corp. 11/1/2012 N $9,912 9/28/12 $39.39 $42.32 $35.48 6% $0.61 $0.68 — — 10% 88% 0%

CAH Cardinal Health Inc. 10/30/2012 OW $13,893 6/28/13 $40.80 $46.23 $36.91 0% $0.73 $0.79 — — 6% 88% 6%

CI Cigna Corporation 11/1/2012 OW $14,063 12/31/12 $48.77 $49.89 $39.01 16% $1.20 $1.36 — — 7% 65% 35%

CVH Cov entry Health Care Inc. 10/26/2012 N $5,725 12/31/12 $42.77 $42.93 $27.50 41% $0.82 $0.72 — — -2% 76% 18%

DVA DaVita Inc. 10/30/2012 $10,364 12/31/12 $109.56 $110.38 $61.49 45% $1.45 $1.56 — — 8% 82% 6%

ESRX Express Scripts Holding Co 11/5/2012 OW $51,020 12/31/12 $62.93 $66.06 $38.10 41% $0.79 $0.99 — — 20% 47% 35%

HUM Humana Inc. 11/5/2012 N $12,056 12/31/12 $74.55 $96.46 $59.92 -15% $2.67 $2.05 — — -3% 76% 18%

LH Laboratory Corp. of America Holdings10/18/2012 N $8,866 12/31/12 $92.45 $95.30 $78.00 8% $1.61 $1.74 — — 6% 65% 24%

MCK McKesson Corp. 10/29/2012 OW $21,014 3/29/13 $89.04 $97.23 $70.82 14% $1.63 $1.78 — — 11% 82% 12%

PDCO Patterson Cos. Inc. 11/19/2012 N $3,800 4/30/13 $34.44 $36.42 $27.48 17% $0.43 $0.48 — — 8% 24% 65%

DGX Quest Diagnostics Inc. 10/17/2012 N $10,066 12/31/12 $63.41 $64.87 $46.70 9% $1.18 $1.18 — — 5% 71% 12%

THC Tenet Healthcare Corp. 11/5/2012 $2,488 12/31/12 $23.88 $26.96 $16.20 16% $0.08 $0.34 — — 31% 53% 29%

UNH UnitedHealth Group Inc. 10/16/2012 NR $58,978 12/31/12 $57.11 $60.75 $42.86 13% $1.17 $1.31 — — 16% 82% 6%

WLP WellPoint Inc. 11/7/2012 N $20,012 12/31/12 $61.54 $74.73 $52.52 -7% $1.77 $1.85 — — 2% 82% 18%

Health Care Technology CERN Cerner Corp. 10/25/2012 $12,881 12/31/12 $75.25 $88.32 $55.69 23% $0.48 $0.59 — — 21% 65% 0%

Biotechnology ALXN Alexion Pharmaceuticals Inc. 10/24/2012 OW $21,509 12/31/12 $111.41 $119.54 $62.02 56% $0.37 $0.47 — — 44% 100% 0%

AMGN Amgen Inc. 10/23/2012 N $65,833 12/31/12 $84.65 $87.45 $54.59 32% $1.40 $1.47 — — 18% 76% 18%

BIIB Biogen Idec Inc. 10/25/2012 N $34,812 12/31/12 $147.29 $157.18 $98.11 34% $1.61 $1.59 — — 14% 76% 24%

CELG Celgene Corp. 10/25/2012 OW $33,375 12/31/12 $77.36 $81.24 $58.53 14% $1.02 $1.26 — — 20% 59% 24%

GILD Gilead Sciences Inc. 10/22/2012 OW $51,167 12/31/12 $67.63 $70.39 $34.45 65% $1.02 $0.94 — — 3% 65% 29%

Pharmaceuticals ABT Abbott Laboratories 10/17/2012 N $110,434 12/31/12 $70.37 $71.91 $51.53 25% $1.18 $1.28 — — 6% 82% 0%

AGN Allergan Inc. 10/30/2012 N $28,198 12/31/12 $91.69 $97.09 $78.42 5% $0.92 $1.04 — — 10% 65% 6%

BMY Bristol-Myers Squibb Co. 10/24/2012 N $55,844 12/31/12 $33.26 $36.34 $30.10 -6% $0.61 $0.42 — — -7% 71% 18%

FRX Forest Laboratories Inc. 10/16/2012 N $9,671 3/29/13 $36.40 $37.70 $28.47 20% $0.91 $0.02 — — -34% 76% 18%

HSP Hospira Inc. 11/7/2012 N $5,374 12/31/12 $32.55 $39.30 $26.92 7% $0.66 $0.45 — — -7% 76% 18%

JNJ Johnson & Johnson 10/16/2012 OW $188,085 12/31/12 $68.22 $69.75 $61.05 4% $1.24 $1.21 — — 3% 88% 6%

LLY Eli Lilly & Co. 10/24/2012 N $58,288 12/31/12 $50.23 $53.55 $35.46 21% $1.13 $0.82 — — 3% 88% 0%

45







Reporting

Date

JPM

Rating

Mkt. Cap.

(mm)

Fiscal

Year

Ending

Current

Price

52-Week

High

52-Week

Low

YTD %

Change

3Q11

EPS (a)

3Q12

EPS Est.

(b)

3Q12

Actual

EPS (c )

Actual

Change

in EPS

(c)/(a)

EPS Δ

Rep. vs

Est. (c)-

(b)

YTD %

Change in

NTM

EPS Est

% of

Quarters

Beating

Estimate

% of

Quarters

Missing

Estimate

MRK Merck & Co Inc 10/26/2012 OW $138,881 12/31/12 $45.60 $46.54 $31.82 21% $0.94 $0.92 — — -4% 76% 12%

MYL Mylan Inc. 10/25/2012 OW $9,717 12/31/12 $23.94 $24.88 $17.02 12% $0.55 $0.77 — — 14% 82% 18%

PRGO Perrigo Co. 11/7/2012 N $10,990 6/28/13 $117.14 $120.78 $87.01 20% $1.10 $1.24 — — 14% 82% 18%

PFE Pfizer Inc. 10/30/2012 OW $187,932 12/31/12 $25.16 $25.59 $18.15 16% $0.62 $0.53 — — 0% 94% 6%

WPI Watson Pharmaceuticals Inc. 10/29/2012 OW $11,147 12/31/12 $87.33 $88.33 $55.00 45% $1.09 $1.29 — — 33% 94% 0%

Life Sciences Tools & Services A Agilent Technologies Inc. 11/19/2012 OW $13,035 10/31/12 $37.41 $46.28 $31.89 7% $0.84 $0.81 — — 6% 59% 35%

LIFE Life Technologies Corp. 10/29/2012 N $8,518 12/31/12 $48.59 $50.99 $36.07 25% $0.94 $0.89 — — 3% 82% 18%

PKI PerkinElmer Inc. 10/25/2012 OW $3,353 12/31/12 $29.39 $30.92 $17.45 47% $0.41 $0.44 — — 17% 94% 6%

TMO Thermo Fisher Scientific Inc. 10/24/2012 N $21,352 12/31/12 $58.41 $61.72 $43.06 30% $1.07 $1.16 — — 11% 82% 18%

WAT Waters Corp. 10/23/2012 OW $7,048 12/31/12 $80.39 $94.47 $70.88 9% $1.14 $1.18 — — 1% 76% 18%

Commercial Banks BBT BB&T Corp. 10/18/2012 N $23,197 12/31/12 $33.18 $34.37 $21.03 32% $0.52 $0.71 — — 27% 65% 35%

CMA Comerica Inc. 10/17/2012 OW $6,047 12/31/12 $31.25 $34.00 $22.69 21% $0.51 $0.65 — — 22% 59% 41%

FITB Fifth Third Bancorp 10/18/2012 N $14,537 12/31/12 $15.82 $16.16 $10.58 24% $0.40 $0.38 — — 13% 65% 35%

FHN First Horizon National Corp. 10/19/2012 OW $2,416 12/31/12 $9.71 $10.99 $6.20 21% $0.14 $0.19 — — 12% 35% 65%

HBAN Huntington Bancshares Inc. 10/18/2012 N $6,077 12/31/12 $7.08 $7.25 $4.66 29% $0.16 $0.17 — — 9% 47% 41%

KEY KeyCorp 10/18/2012 OW $8,104 12/31/12 $8.59 $9.12 $6.21 12% $0.22 $0.21 — — 13% 59% 35%

MTB M&T Bank Corp. 10/17/2012 $12,505 12/31/12 $98.63 $98.99 $67.23 29% $1.32 $1.85 — — 11% 59% 41%

PNC PNC Financial Services Group Inc.10/16/2012 OW $34,173 12/31/12 $64.55 $67.89 $48.80 12% $1.55 $1.62 — — 7% 71% 29%

RF Regions Financial Corp. 10/23/2012 N $10,671 12/31/12 $7.55 $7.73 $3.42 76% $0.08 $0.21 — — 65% 47% 41%

STI SunTrust Banks Inc. 10/22/2012 OW $15,971 12/31/12 $29.66 $30.79 $15.79 68% $0.39 $1.79 — — 50% 71% 29%

USB U.S. Bancorp 10/17/2012 OW $65,577 12/31/12 $34.60 $35.46 $23.54 28% $0.64 $0.74 — — 14% 65% 29%

WFC Wells Fargo & Co. 10/12/2012 OW $186,091 12/31/12 $35.23 $36.60 $23.19 28% $0.72 $0.87 — — 12% 76% 18%

ZION Zions Bancorporation 10/22/2012 OW $4,025 12/31/12 $21.86 $22.81 $14.52 34% $0.35 $0.33 — — 4% 41% 59%

Thrifts & Mortgage Finance HCBK Hudson City Bancorp Inc. 10/22/2012 $4,325 12/31/12 $8.19 $8.23 $5.09 31% $0.17 $0.14 — — -13% 47% 29%

PBCT People's United Financial Inc. 10/18/2012 N $4,278 12/31/12 $12.18 $13.79 $11.20 -5% $0.15 $0.19 — — -3% 12% 47%

Diversified Financial Services BAC Bank of America Corp. 10/17/2012 OW $99,206 12/31/12 $9.21 $10.10 $4.92 66% $0.56 -$0.07 — — -16% 41% 59%

C Citigroup Inc. 10/15/2012 N $103,047 12/31/12 $35.14 $38.40 $23.30 34% $1.23 $0.96 — — 2% 41% 59%

CME CME Group Inc. Cl A 10/25/2012 UW $18,927 12/31/12 $56.92 $60.92 $44.94 17% $0.95 $0.70 — — -10% 53% 35%

ICE IntercontinentalExchange Inc. 11/5/2012 OW $9,363 12/31/12 $128.68 $142.75 $110.67 7% $1.87 $1.73 — — 8% 71% 24%

JPM JPMorgan Chase & Co. 10/12/2012 $158,674 12/31/12 $41.77 $46.49 $28.28 26% $1.02 $1.21 — — 6% 65% 35%

46







Reporting

Date

JPM

Rating

Mkt. Cap.

(mm)

Fiscal

Year

Ending

Current

Price

52-Week

High

52-Week

Low

YTD %

Change

3Q11

EPS (a)

3Q12

EPS Est.

(b)

3Q12

Actual

EPS (c )

Actual

Change

in EPS

(c)/(a)

EPS Δ

Rep. vs

Est. (c)-

(b)

YTD %

Change in

NTM

EPS Est

% of

Quarters

Beating

Estimate

% of

Quarters

Missing

Estimate

LUK Leucadia National Corp. 11/5/2012 $5,415 12/31/12 $22.14 $29.79 $19.58 -3% — — — — —

MCO Moody 's Corp. 10/26/2012 $9,781 12/31/12 $44.00 $46.26 $30.73 31% $0.57 $0.62 — — 13% 88% 12%

NDAQ NASDAQ OMX Group Inc. 10/24/2012 $3,932 12/31/12 $23.56 $27.34 $21.03 -4% $0.67 $0.60 — — -1% 59% 24%

NYX NYSE Euronext 11/6/2012 NR $5,990 12/31/12 $24.35 $31.25 $23.31 -7% $0.71 $0.46 — — -18% 47% 53%

Consumer Finance AXP American Express Co. 10/17/2012 N $65,718 12/31/12 $57.97 $61.42 $44.45 23% $1.03 $1.08 — — 13% 76% 24%

COF Capital One Financial Corp. 10/18/2012 OW $33,832 12/31/12 $58.23 $60.05 $39.14 38% $1.77 $1.68 — — 12% 59% 41%

DFS Discov er Financial Services 9/27/2012 OW $19,908 11/30/12 $39.44 $40.81 $21.98 64% $1.18 $1.03 $1.21 3% $0.18 33% 83% 17%

SLM SLM Corp. 10/17/2012 $7,820 12/31/12 $16.66 $16.94 $11.97 24% $0.36 $0.54 — — 20% 47% 53%

Capital Markets AMP Ameriprise Financial Inc. 10/24/2012 $11,965 12/31/12 $56.78 $60.47 $39.93 14% $1.04 $1.37 — — 8% 53% 47%

BK Bank of New York Mellon Corp. 10/17/2012 N $27,359 12/31/12 $23.16 $24.95 $17.67 16% $0.53 $0.54 — — -1% 35% 53%

BLK BlackRock Inc. 10/17/2012 $30,866 12/31/12 $187.36 $209.37 $146.53 5% $2.83 $3.29 — — 13% 53% 41%

ETFC E*TRADE Financial Corp. 10/18/2012 $2,591 12/31/12 $9.07 $11.69 $7.08 14% $0.16 $0.08 — — -27% 29% 71%

FII Federated Investors Inc. 10/25/2012 UW $2,148 12/31/12 $20.63 $23.89 $14.36 36% $0.37 $0.41 — — 8% 41% 59%

BEN Franklin Resources Inc. 10/25/2012 N $27,017 9/28/12 $127.32 $131.24 $91.22 33% $1.88 $2.24 — — 9% 59% 35%

GS Goldman Sachs Group Inc. 10/16/2012 UW $57,568 12/31/12 $120.08 $128.72 $86.90 33% -$0.84 $2.14 — — -6% 44% 56%

IVZ INVESCO Ltd. 11/1/2012 OW $11,117 12/31/12 $24.97 $26.94 $16.66 24% $0.42 $0.44 — — 13% 35% 41%

LM Legg Mason Inc. 10/22/2012 $3,329 3/29/13 $24.65 $29.56 $22.36 2% $0.39 $0.51 — — -4% 35% 65%

MS Morgan Stanley 10/18/2012 OW $34,374 12/31/12 $17.40 $21.19 $12.26 15% $1.14 $0.24 — — -14% 25% 75%

NTRS Northern Trust Corp. 10/17/2012 N $11,256 12/31/12 $46.80 $49.68 $34.87 18% $0.71 $0.74 — — 9% 35% 47%

TROW T. Rowe Price Group Inc. 10/24/2012 N $16,164 12/31/12 $63.68 $66.00 $49.35 12% $0.71 $0.83 — — 19% 47% 47%

SCHW Charles Schwab Corp. 10/11/2012 N $16,525 12/31/12 $12.97 $15.53 $10.67 15% $0.18 $0.17 — — -1% 41% 53%

STT State Street Corp. 10/16/2012 UW $19,864 12/31/12 $41.46 $47.20 $32.30 3% $0.96 $0.96 — — 5% 65% 24%

Insurance ACE ACE Ltd. 10/23/2012 OW $26,293 12/31/12 $77.54 $78.59 $61.27 11% $2.22 $1.79 — — 4% 76% 18%

AFL AFLAC Inc. 10/23/2012 OW $22,294 12/31/12 $47.61 $50.33 $37.40 10% $1.66 $1.66 — — 2% 71% 18%

ALL Allstate Corp. 10/31/2012 OW $19,673 12/31/12 $40.57 $41.55 $24.10 48% $0.16 $1.03 — — 20% 35% 65%

AIG American International Group Inc. 11/1/2012 N $57,853 12/31/12 $35.49 $36.08 $19.96 53% -$1.60 $0.79 — — 40% 47% 53%

AON AON Plc 10/22/2012 OW $17,055 12/31/12 $52.90 $54.29 $43.37 13% $0.69 $0.89 — — 26% 41% 41%

AIZ Assurant Inc. 10/24/2012 N $3,174 12/31/12 $39.14 $44.54 $32.41 -5% $0.79 $1.35 — — 7% 47% 53%

BRK.B Berkshire Hathaway Inc. Cl B 11/7/2012 $96,395 12/31/12 $88.73 $90.76 $72.55 16% $1.54 $1.38 — — 6% 57% 43%

CB Chubb Corp. 10/25/2012 UW $20,627 12/31/12 $77.59 $78.55 $60.67 12% $0.88 $1.42 — — 1% 53% 41%

47







Reporting

Date

JPM

Rating

Mkt. Cap.

(mm)

Fiscal

Year

Ending

Current

Price

52-Week

High

52-Week

Low

YTD %

Change

3Q11

EPS (a)

3Q12

EPS Est.

(b)

3Q12

Actual

EPS (c )

Actual

Change

in EPS

(c)/(a)

EPS Δ

Rep. vs

Est. (c)-

(b)

YTD %

Change in

NTM

EPS Est

% of

Quarters

Beating

Estimate

% of

Quarters

Missing

Estimate

CINF Cincinnati Financial Corp. 10/25/2012 $6,255 12/31/12 $38.49 $40.22 $25.69 26% $0.12 $0.37 — — 10% 35% 65%

GNW Genworth Financial Inc. Cl A 10/30/2012 N $2,689 12/31/12 $5.47 $9.68 $4.06 -16% $0.21 $0.21 — — -11% 12% 88%

HIG Hartford Financial Services Group Inc.11/1/2012 N $9,161 12/31/12 $21.02 $23.29 $14.95 29% $0.05 $0.78 — — 1% 41% 59%

LNC Lincoln National Corp. 11/1/2012 N $6,709 12/31/12 $24.03 $27.54 $15.50 24% $1.00 $1.01 — — 12% 53% 47%

L Loews Corp. 10/29/2012 $16,437 12/31/12 $41.55 $42.86 $35.29 10% $0.44 $0.72 — — 9% 35% 65%

MMC Marsh & McLennan Cos. 10/29/2012 UW $18,666 12/31/12 $34.30 $34.99 $27.09 8% $0.24 $0.38 — — 11% 53% 29%

MET MetLife Inc. 10/31/2012 OW $36,828 12/31/12 $34.67 $39.55 $27.60 11% $1.11 $1.27 — — 9% 59% 41%

PFG Principal Financial Group Inc. 10/25/2012 NR $7,995 12/31/12 $27.09 $29.96 $21.42 10% $0.61 $0.48 — — 3% 29% 47%

PGR Progressive Corp. 11/2/2012 N $13,372 12/31/12 $22.11 $23.41 $17.49 13% $0.29 $0.26 — — -11% 53% 47%

PRU Prudential Financial Inc. 11/7/2012 OW $26,007 12/31/12 $56.05 $65.17 $44.47 12% $1.07 $1.66 — — 9% 53% 47%

TMK Torchmark Corp. 10/24/2012 N $4,853 12/31/12 $50.87 $53.15 $36.52 17% $1.22 $1.30 — — 6% 53% 29%

TRV Travelers Cos. Inc. 10/18/2012 N $26,744 12/31/12 $69.40 $70.00 $49.52 17% $0.79 $1.49 — — 12% 41% 53%

UNM Unum Group 10/31/2012 OW $5,477 12/31/12 $19.55 $25.00 $18.28 -7% $0.74 $0.77 — — 3% 53% 29%

XL XL Group PLC 11/5/2012 N $7,658 12/31/12 $25.05 $25.11 $18.65 27% $0.28 $0.46 — — 4% 47% 53%

Real Estate Investment Trusts (REITs)AMT American Tower Corp 10/29/2012 OW $28,669 12/31/12 $72.55 $75.62 $53.02 21% -$0.04 $0.38 — — 38% 53% 35%

AIV Apartment Investment & Management Co.11/1/2012 UW $3,756 12/31/12 $25.81 $28.30 $20.17 13% -$0.12 -$0.09 — — Neg 100% 0%

AVB AvalonBay Communities Inc. 10/24/2012 N $13,056 12/31/12 $134.72 $151.23 $116.25 3% $0.49 $0.73 — — 24% 53% 47%

BXP Boston Properties Inc. 10/23/2012 OW $16,509 12/31/12 $109.50 $117.00 $87.00 10% $0.48 $0.34 — — 21% 59% 41%

EQR Equity Residential 10/24/2012 N $16,959 12/31/12 $56.34 $65.72 $52.10 -1% $0.35 $0.27 — — 30% 82% 18%

HCP HCP Inc. 10/30/2012 N $19,543 12/31/12 $45.50 $47.75 $35.32 10% $0.41 $0.47 — — 8% 47% 47%

HCN Health Care REIT Inc. 11/6/2012 OW $15,180 12/31/12 $59.50 $62.80 $46.50 9% $0.21 $0.33 — — 10% 29% 71%

HST Host Hotels & Resorts Inc. 10/10/2012 N $11,323 12/31/12 $15.67 $17.57 $10.93 6% -$0.05 -$0.02 -$0.05 - -$0.03 135% 28% 67%

KIM Kimco Realty Corp. 10/30/2012 OW $8,241 12/31/12 $20.25 $21.16 $14.51 25% $0.09 $0.06 — — -7% 35% 59%

PCL Plum Creek Timber Company Inc. 10/29/2012 $6,834 12/31/12 $42.31 $44.99 $34.22 16% $0.31 $0.36 — — 4% 53% 29%

PLD Prologis Inc. 10/23/2012 OW $16,045 12/31/12 $34.83 $37.58 $24.02 22% $0.12 $0.01 — — — 41% 41%

PSA Public Storage 11/1/2012 OW $23,779 12/31/12 $138.60 $152.68 $110.27 3% $0.69 $1.07 — — 15% 47% 53%

SPG Simon Property Group Inc. 10/25/2012 OW $47,320 12/31/12 $153.04 $164.17 $111.50 19% $0.93 $0.78 — — 20% 65% 35%

VTR Ventas Inc. 10/26/2012 $18,883 12/31/12 $63.93 $68.15 $48.26 16% $0.35 $0.31 — — -8% 59% 35%

VNO Vornado Realty Trust 11/2/2012 N $14,672 12/31/12 $78.96 $88.50 $70.00 3% $0.27 $0.36 — — -21% 43% 57%

WY Weyerhaeuser Co. 10/26/2012 $14,095 12/31/12 $26.21 $28.06 $15.40 40% $0.12 $0.17 — — 83% 71% 24%

48







Reporting

Date

JPM

Rating

Mkt. Cap.

(mm)

Fiscal

Year

Ending

Current

Price

52-Week

High

52-Week

Low

YTD %

Change

3Q11

EPS (a)

3Q12

EPS Est.

(b)

3Q12

Actual

EPS (c )

Actual

Change

in EPS

(c)/(a)

EPS Δ

Rep. vs

Est. (c)-

(b)

YTD %

Change in

NTM

EPS Est

% of

Quarters

Beating

Estimate

% of

Quarters

Missing

Estimate

Real Estate Management & DevelopmentCBG CBRE Group Inc 10/29/2012 OW $6,056 12/31/12 $18.45 $21.16 $13.82 21% $0.24 $0.33 — — 13% 47% 47%

Internet Software & Services AKAM Akamai Technologies Inc. 10/24/2012 N $6,707 12/31/12 $37.83 $40.32 $22.45 17% $0.34 $0.41 — — 14% 65% 29%

EBAY eBay Inc. 10/17/2012 OW $60,258 12/31/12 $46.76 $50.65 $28.15 54% $0.48 $0.55 — — 15% 94% 0%

GOOG Google Inc. Cl A 10/18/2012 OW $195,054 12/31/12 $744.56 $774.38 $523.20 15% $9.72 $10.57 — — 10% 65% 29%

VRSN VeriSign Inc. 10/25/2012 N $7,456 12/31/12 $47.68 $50.15 $29.37 33% $0.39 $0.49 — — 18% 47% 41%

YHOO Yahoo! Inc. 10/22/2012 N $18,753 12/31/12 $15.83 $16.79 $14.35 -2% $0.23 $0.26 — — 28% 65% 6%

IT Services ACN Accenture PLC 9/27/2012 OW $44,150 8/30/13 $69.55 $71.79 $51.08 31% $0.91 $0.88 $0.88 -3% $0.00 9% 83% 6%

ADP Automatic Data Processing Inc. 10/30/2012 N $28,188 6/28/13 $58.20 $59.96 $47.60 8% $0.61 $0.62 — — 5% 53% 12%

CTSH Cognizant Technology Solutions Corp.11/7/2012 OW $20,708 12/31/12 $69.36 $78.00 $53.92 8% $0.73 $0.87 — — 14% 82% 0%

CSC Computer Sciences Corp. 11/6/2012 UW $4,868 3/29/13 $31.33 $34.74 $22.19 32% $0.85 $0.47 — — -34% 65% 24%

FIS Fidelity National Information Services Inc.11/5/2012 N $9,174 12/31/12 $31.14 $34.85 $22.53 17% $0.62 $0.62 — — 8% 59% 18%

FISV Fiserv Inc. 10/30/2012 OW $9,882 12/31/12 $72.84 $75.24 $53.91 24% $1.16 $1.27 — — 11% 53% 29%

IBM International Business Machines Corp.10/16/2012 OW $234,635 12/31/12 $205.82 $211.79 $176.17 12% $3.28 $3.61 — — 11% 100% 0%

MA MasterCard Inc. Cl A 10/31/2012 OW $55,305 12/31/12 $462.09 $483.00 $315.53 24% $5.63 $5.91 — — 15% 94% 6%

PAYX Paychex Inc. 9/24/2012 UW $11,907 5/31/13 $32.76 $34.70 $27.11 9% $0.41 $0.41 $0.42 2% $0.01 4% 50% 11%

SAI SAIC Inc. 12/3/2012 OW $3,777 1/31/13 $11.05 $14.20 $10.31 -10% -$0.27 $0.35 — — 1% 59% 35%

TDC Teradata Corp. 10/29/2012 $12,261 12/31/12 $72.72 $80.97 $43.77 50% $0.59 $0.67 — — 21% 100% 0%

TSS Total System Services Inc. 10/23/2012 $4,380 12/31/12 $23.29 $25.06 $18.11 19% $0.30 $0.32 — — 11% 41% 12%

V Visa Inc. 10/31/2012 OW $72,479 9/28/12 $137.42 $141.59 $87.40 35% $1.27 $1.49 — — 19% 100% 0%

WU Western Union Co. 10/30/2012 N $10,831 12/31/12 $17.98 $19.82 $15.79 -2% $0.40 $0.45 — — 10% 71% 12%

Software ADBE Adobe Systems Inc. 9/19/2012 $15,599 11/30/12 $31.51 $34.78 $25.39 11% $0.55 $0.58 $0.58 5% $0.00 -4% 89% 0%

ADSK Autodesk Inc. 11/14/2012 N $7,041 1/31/13 $31.03 $42.69 $27.70 2% $0.44 $0.44 — — 6% 71% 18%

BMC BMC Software Inc. 10/31/2012 N $6,691 3/29/13 $41.96 $45.70 $31.62 28% $0.87 $0.88 — — 6% 65% 29%

CA CA Inc. 10/25/2012 OW $11,674 3/29/13 $24.89 $28.00 $19.54 23% $0.51 $0.59 — — 13% 82% 12%

CTXS Citrix Systems Inc. 10/24/2012 UW $12,844 12/31/12 $68.70 $87.99 $55.94 13% $0.64 $0.66 — — 12% 88% 6%

EA Electronic Arts Inc. 10/29/2012 $4,104 3/29/13 $12.89 $26.13 $10.77 -37% $0.05 $0.10 — — 2% 65% 29%

INTU Intuit Inc. 11/12/2012 OW $17,616 7/31/13 $59.64 $62.33 $48.42 13% -$0.10 -$0.06 — — 12% 59% 41%

MSFT Microsoft Corp. 10/18/2012 N $244,328 6/28/13 $28.98 $32.95 $24.30 12% $0.68 $0.56 — — 7% 59% 24%

ORCL Oracle Corp. 9/20/2012 OW $147,367 5/31/13 $30.58 $33.81 $24.91 19% $0.48 $0.53 $0.53 10% $0.00 8% 78% 11%

RHT Red Hat Inc. 9/24/2012 UW $10,412 2/28/13 $53.86 $62.75 $39.19 30% $0.29 $0.29 $0.28 -3% -$0.01 16% 83% 6%

49







Reporting

Date

JPM

Rating

Mkt. Cap.

(mm)

Fiscal

Year

Ending

Current

Price

52-Week

High

52-Week

Low

YTD %

Change

3Q11

EPS (a)

3Q12

EPS Est.

(b)

3Q12

Actual

EPS (c )

Actual

Change

in EPS

(c)/(a)

EPS Δ

Rep. vs

Est. (c)-

(b)

YTD %

Change in

NTM

EPS Est

% of

Quarters

Beating

Estimate

% of

Quarters

Missing

Estimate

CRM salesforce.com inc. 11/20/2012 N $20,872 1/31/13 $150.16 $164.75 $94.09 48% $0.34 $0.32 — — 16% 76% 18%

SYMC Symantec Corp. 10/24/2012 OW $12,410 3/29/13 $17.68 $19.54 $13.06 13% $0.39 $0.37 — — -2% 76% 18%

Communications Equipment CSCO Cisco Systems Inc. 11/13/2012 OW $97,088 7/31/13 $18.31 $21.30 $14.96 1% $0.43 $0.46 — — 8% 100% 0%

FFIV F5 Networks Inc. 10/24/2012 N $7,806 9/28/12 $98.77 $139.46 $84.79 -7% $1.06 $1.18 — — 14% 88% 6%

HRS Harris Corp. 10/29/2012 N $5,729 6/28/13 $50.86 $52.23 $33.24 41% $1.06 $1.12 — — -2% 82% 12%

JDSU JDS Uniphase Corp. 11/1/2012 $2,404 6/28/13 $10.46 $15.17 $8.47 0% $0.18 $0.12 — — 6% 71% 18%

JNPR Juniper Networks Inc. 10/23/2012 N $8,610 12/31/12 $16.35 $25.61 $14.01 -20% $0.28 $0.17 — — -26% 59% 12%

MSI Motorola Solutions Inc. 10/24/2012 N $14,301 12/31/12 $49.95 $52.78 $43.36 8% $0.65 $0.73 — — 19% 94% 6%

QCOM QUALCOMM Inc. 11/7/2012 OW $101,826 9/28/12 $59.78 $68.87 $49.78 9% $0.80 $0.82 — — 12% 82% 12%

Computers & Peripherals AAPL Apple Inc. 10/25/2012 OW $600,793 9/28/12 $640.91 $705.07 $363.32 58% $7.05 $8.91 — — 51% 94% 6%

DELL Dell Inc. 11/15/2012 OW $16,357 1/31/13 $9.43 $18.36 $9.34 -36% $0.54 $0.40 — — -12% 53% 41%

EMC EMC Corp. 10/24/2012 OW $54,231 12/31/12 $25.84 $30.00 $21.25 20% $0.37 $0.42 — — 13% 71% 12%

HPQ Hewlett-Packard Co. 11/20/2012 UW $27,880 10/31/12 $14.18 $30.00 $14.02 -45% $1.17 $1.15 — — -13% 65% 29%

NTAP NetApp Inc. 11/14/2012 OW $10,649 4/30/13 $29.31 $46.80 $27.79 -19% $0.63 $0.48 — — -13% 71% 24%

SNDK SanDisk Corp. 10/18/2012 N $10,280 12/31/12 $42.56 $53.46 $30.99 -14% $1.20 $0.33 — — -43% 76% 24%

STX Seagate Technology Inc. 10/30/2012 N $11,068 6/28/13 $28.23 $35.71 $10.86 72% $0.34 $1.71 — — 110% 65% 29%

WDC Western Digital Corp. 10/22/2012 N $8,918 6/28/13 $36.37 $45.94 $22.64 18% $1.10 $2.31 — — 105% 82% 12%

Electronic Equipment Instruments & ComponentsAPH Amphenol Corp. Cl A 10/17/2012 $9,394 12/31/12 $58.35 $63.70 $40.99 29% $0.81 $0.89 — — 17% 88% 6%

GLW Corning Inc. 10/24/2012 N $19,283 12/31/12 $12.95 $15.75 $10.62 0% $0.48 $0.32 — — -18% 53% 35%

FLIR FLIR Systems Inc 10/25/2012 UW $2,959 12/31/12 $19.59 $27.92 $17.99 -22% $0.40 $0.36 — — -8% 59% 24%

JBL Jabil Circuit Inc. 9/25/2012 $3,493 8/30/13 $17.00 $27.40 $16.89 -14% $0.62 $0.58 $0.54 -13% -$0.04 -3% 67% 22%

MOLX Molex Inc. 10/23/2012 $2,460 6/28/13 $25.74 $28.46 $21.15 8% $0.47 $0.40 — — -6% 53% 41%

TEL TE Connectivity Ltd. 11/5/2012 $14,131 9/28/12 $33.03 $37.69 $29.39 7% $0.89 $0.75 — — 0% 76% 24%

Office Electronics XRX Xerox Corp. 10/23/2012 UW $9,242 12/31/12 $7.07 $8.84 $6.36 -11% $0.26 $0.25 — — -2% 65% 18%

Semiconductors & Semiconductor EquipmentAMD Advanced Micro Devices Inc. 10/18/2012 N $2,229 12/31/12 $3.15 $8.35 $3.09 -42% $0.15 $0.01 — — -47% 65% 35%

ALTR Altera Corp. 10/23/2012 N $10,257 12/31/12 $32.06 $41.63 $29.67 -14% $0.57 $0.46 — — 0% 65% 24%

ADI Analog Devices Inc. 11/27/2012 OW $11,412 10/31/12 $38.18 $41.79 $32.18 7% $0.60 $0.57 — — 7% 65% 35%

AMAT Applied Materials Inc. 11/15/2012 N $13,489 10/31/12 $10.90 $13.94 $9.97 2% $0.21 $0.03 — — -9% 53% 35%

BRCM Broadcom Corp. 10/23/2012 OW $16,690 12/31/12 $32.92 $39.66 $27.59 12% $0.82 $0.77 — — 13% 94% 6%

FSLR First Solar Inc. 10/29/2012 UW $1,830 12/31/12 $21.04 $61.68 $11.43 -38% $2.25 $1.02 — — -43% 76% 24%

50







Reporting

Date

JPM

Rating

Mkt. Cap.

(mm)

Fiscal

Year

Ending

Current

Price

52-Week

High

52-Week

Low

YTD %

Change

3Q11

EPS (a)

3Q12

EPS Est.

(b)

3Q12

Actual

EPS (c )

Actual

Change

in EPS

(c)/(a)

EPS Δ

Rep. vs

Est. (c)-

(b)

YTD %

Change in

NTM

EPS Est

% of

Quarters

Beating

Estimate

% of

Quarters

Missing

Estimate

INTC Intel Corp. 10/16/2012 N $108,865 12/31/12 $21.76 $29.27 $21.70 -10% $0.65 $0.50 — — -11% 76% 24%

KLAC KLA-Tencor Corp. 10/25/2012 UW $7,597 6/28/13 $45.55 $55.43 $41.57 -6% $1.17 $0.89 — — 14% 76% 24%

LRCX Lam Research Corp. 10/17/2012 UW $5,655 6/28/13 $31.89 $45.48 $31.17 -14% $0.63 $0.41 — — 3% 76% 24%

LLTC Linear Technology Corp. 10/16/2012 UW $7,443 6/28/13 $31.61 $34.50 $28.28 5% $0.49 $0.46 — — 8% 82% 12%

LSI LSI Corp. 10/24/2012 N $3,697 12/31/12 $6.63 $9.20 $5.06 11% $0.14 $0.17 — — 55% 71% 6%

MCHP Microchip Technology Inc. 11/8/2012 N $6,208 3/29/13 $32.05 $38.88 $30.23 -13% $0.46 $0.50 — — 17% 53% 18%

MU Micron Technology Inc. 9/27/2012 N $5,861 8/30/13 $5.76 $9.16 $5.06 -8% -$0.14 -$0.22 -$0.24 - -$0.02 Pos to Neg 33% 67%

NVDA NVIDIA Corp. 11/8/2012 N $7,849 1/31/13 $12.67 $16.90 $11.63 -9% $0.29 $0.30 — — -4% 65% 29%

TER Teradyne Inc. 10/22/2012 $2,531 12/31/12 $13.49 $18.01 $11.68 -1% $0.34 $0.46 — — 57% 76% 24%

TXN Texas Instruments Incorporated 10/22/2012 OW $30,913 12/31/12 $27.17 $34.24 $26.06 -7% $0.61 $0.46 — — -6% 71% 24%

XLNX Xilinx Inc. 10/17/2012 OW $8,560 3/29/13 $32.65 $37.74 $28.97 2% $0.47 $0.41 — — 1% 76% 18%

Diversified Telecommunication ServicesT AT&T Inc. 10/24/2012 OW $212,991 12/31/12 $36.92 $38.58 $27.41 22% $0.61 $0.61 — — 3% 41% 41%

CTL CenturyLink Inc. 11/7/2012 OW $24,644 12/31/12 $39.58 $43.43 $33.17 6% $0.34 $0.59 — — -4% 65% 29%

FTR Frontier Communications Corp. 11/6/2012 N $4,893 12/31/12 $4.90 $6.40 $3.06 -5% $0.05 $0.07 — — 3% 29% 65%

VZ Verizon Communications Inc. 10/18/2012 N $130,422 12/31/12 $45.78 $48.77 $35.17 14% $0.56 $0.65 — — 9% 35% 47%

WIN Windstream Corp. 11/8/2012 N $5,933 12/31/12 $10.09 $12.60 $9.00 -14% $0.19 $0.13 — — -31% 0% 82%

Wireless Telecommunication ServicesCCI Crown Castle International Corp. 10/24/2012 N $18,968 12/31/12 $64.73 $67.61 $39.28 44% $0.16 $0.16 — — 37% 47% 41%

PCS MetroPCS Communications Inc. 10/30/2012 NR $4,424 12/31/12 $12.04 $14.51 $5.53 39% $0.19 $0.26 — — -15% 53% 47%

S Sprint Nex tel Corp. 10/25/2012 OW $15,122 12/31/12 $5.04 $5.76 $2.10 115% -$0.10 -$0.43 — — Neg 41% 53%

Electric Utilities AEP American Electric Power Co. Inc. 10/22/2012 N $21,375 12/31/12 $44.08 $44.84 $36.97 7% $1.17 $1.04 — — -2% 59% 41%

DUK Duke Energy Corp. 11/8/2012 NR $45,601 12/31/12 $64.78 $71.13 $58.74 -2% $1.50 $1.44 — — 3% 76% 24%

EIX Edison International 11/1/2012 $15,238 12/31/12 $46.77 $47.52 $37.48 13% $1.30 $1.08 — — -1% 47% 41%

ETR Entergy Corp. 10/30/2012 NR $12,464 12/31/12 $70.29 $74.50 $62.97 -4% $3.53 $2.17 — — -9% 53% 47%

EXC Exelon Corp. 10/31/2012 N $30,985 12/31/12 $36.30 $45.45 $34.54 -16% $1.12 $0.72 — — -13% 76% 18%

FE FirstEnergy Corp. 11/8/2012 $18,665 12/31/12 $44.63 $51.14 $40.37 1% $1.34 $1.15 — — -6% 47% 47%

NEE Nex tEra Energy Inc 10/24/2012 OW $29,547 12/31/12 $69.89 $72.22 $52.32 15% $1.31 $1.38 — — 7% 47% 35%

NU Northeast Utilities 10/29/2012 $12,252 12/31/12 $39.04 $40.86 $32.13 8% $0.51 $0.67 — — 3% 53% 47%

POM Pepco Holdings Inc. 11/6/2012 N $4,395 12/31/12 $19.20 $20.64 $18.14 -5% $0.35 $0.42 — — 1% 47% 53%

PNW Pinnacle West Capital Corp. 11/1/2012 $5,793 12/31/12 $52.88 $54.66 $43.53 10% $2.24 $2.29 — — 5% 47% 53%

PPL PPL Corp. 11/8/2012 $17,016 12/31/12 $29.30 $30.27 $26.68 0% $0.76 $0.69 — — -2% 71% 29%

51







Reporting

Date

JPM

Rating

Mkt. Cap.

(mm)

Fiscal

Year

Ending

Current

Price

52-Week

High

52-Week

Low

YTD %

Change

3Q11

EPS (a)

3Q12

EPS Est.

(b)

3Q12

Actual

EPS (c )

Actual

Change

in EPS

(c)/(a)

EPS Δ

Rep. vs

Est. (c)-

(b)

YTD %

Change in

NTM

EPS Est

% of

Quarters

Beating

Estimate

% of

Quarters

Missing

Estimate

SO Southern Co. 10/31/2012 $40,206 12/31/12 $45.96 $48.59 $42.11 -1% $1.07 $1.14 — — 3% 59% 24%

XEL Xcel Energy Inc. 10/25/2012 N $13,510 12/31/12 $27.71 $29.92 $24.50 0% $0.69 $0.71 — — 3% 41% 47%

Gas Utilities GAS AGL Resources Inc. 11/1/2012 $4,797 12/31/12 $40.82 $43.69 $36.59 -3% $0.02 $0.22 — — -6% 53% 41%

OKE ONEOK Inc. 10/30/2012 OW $9,855 12/31/12 $48.06 $49.79 $34.54 11% $0.29 $0.33 — — 9% 59% 41%

Multi-Utilities AEE Ameren Corp. 11/9/2012 $7,937 12/31/12 $32.71 $35.30 $29.44 -1% $1.57 $1.36 — — -13% 35% 65%

CNP CenterPoint Energy Inc. 11/7/2012 OW $9,099 12/31/12 $21.29 $21.71 $18.07 6% $0.37 $0.33 — — 4% 47% 53%

CMS CMS Energy Corp. 10/25/2012 $6,288 12/31/12 $23.73 $24.98 $19.57 7% $0.53 $0.60 — — 5% 53% 47%

ED Consolidated Edison Inc. 11/5/2012 $17,594 12/31/12 $60.07 $65.98 $56.07 -3% $1.33 $1.37 — — 3% 41% 59%

D Dominion Resources Inc. (Virginia)10/25/2012 N $30,514 12/31/12 $53.22 $55.62 $48.87 0% $0.95 $0.98 — — 3% 47% 47%

DTE DTE Energy Co. 10/24/2012 $10,407 12/31/12 $60.59 $62.56 $49.06 11% $1.07 $1.13 — — 6% 71% 29%

TEG Integrys Energy Group Inc. 11/5/2012 $4,329 12/31/12 $55.29 $61.92 $48.19 2% $0.43 $0.36 — — -5% 50% 50%

NI NiSource Inc. 10/22/2012 $7,279 12/31/12 $25.55 $26.15 $21.17 7% $0.11 $0.13 — — 7% 47% 47%

PCG PG&E Corp. 11/6/2012 N $18,393 12/31/12 $43.13 $47.03 $36.84 5% $1.08 $0.86 — — -7% 53% 41%

PEG Public Service Enterprise Group Inc.11/1/2012 $16,431 12/31/12 $32.48 $34.96 $28.92 -2% $0.83 $0.71 — — -4% 59% 29%

SCG SCANA Corp. 10/31/2012 $6,377 12/31/12 $48.57 $50.34 $40.33 8% $0.81 $0.89 — — 4% 47% 47%

SRE Sempra Energy 11/1/2012 N $15,992 12/31/12 $66.76 $72.32 $50.53 21% $1.22 $0.96 — — -4% 65% 35%

TE TECO Energy Inc. 10/29/2012 $3,810 12/31/12 $17.59 $19.41 $16.90 -8% $0.42 $0.38 — — -15% 41% 53%

WEC Wisconsin Energy Corp. 10/31/2012 $8,792 12/31/12 $38.15 $41.48 $31.18 9% $0.55 $0.57 — — 5% 65% 24%

Independent Power Producers & Energy TradersAES AES Corp. 11/7/2012 $7,959 12/31/12 $10.64 $14.01 $10.14 -10% $0.27 $0.34 — — -2% 36% 57%

NRG NRG Energy Inc. 10/29/2012 $5,255 12/31/12 $23.02 $23.50 $14.29 27% $0.43 $0.43 — — -49% 59% 35%

52



US Equity Strategy Recent Publications

US Strategy

Only 2 of 7 indicators at '07/’10/’11/early ’12 “peak” triggered. Remain constructive and favor high-beta Cyclicals. – 10/4/12

Weak 2H September Leads to Positive October; Focus on High-Beta Cyclicals: 47 Ideas– 9/27/12

2012 Beta chase expected to exceed 11%-15% seen ’09, ’10, ’11. 47 ideas – 9/19/12

Raising short-term target to 1495 (from 1475). Still cycle into Cyclicals. 27 ideas –9/13/12

Stay constructive on S&P 500… – 9/6/12

Global CC: Equity Markets Rally into Close Elections… – 9/4/12

Reasons to Say Constructive. HY and Positioning Data – 8/31/12

Raising Short-Term S&P 500 Target to 1475 by Early Nov. Maintain YE @ 1430. Cycle into Cyclicals Now. 12 Ideas – 8/17/12

US Fiscal Cliff: Election Outcomes Affect Policy Outcomes. 15% Chance of “Falling Off the Cliff” – 8/7/12

Surprising Upturn in Eco Surprise Indices Positive for Cyclicals – 8/3/12

Only 13% of Active Managers Outperforming, Worst YTD in 15 Years; Contrarian “Buy” Signals from Mutual Fund and HF Beta – 7/27/12

Corporates AGAIN Are the Incremental Buyer of Equities. Buybacks Soared in June to $67 Billion. – 7/23/12

See Energy Gaining in 2H; 14 Ideas – 7/20/12

2Q12 S&P 500 EPS: Poor Visibility + Pre-announce = NERVES: 2Q tracking to $26. $105 EPS on track…looks a lot like 4Q11 and 1Q12. Stay constructive and patient –7/13/12

6 reasons we would be buyers of the S&P at 1275-1325, despite weak June labor report… – 7/9/2012

Special Reports

MARKETING DECK: We See a “Melt-Up” Into Election Day: S&P 500 to EXCEED 1495 Short-Term…Market’s Base Case is Obama Victory – 9/20/12

SLIDES: Housing Food Chain IV: 10 Reasons We Are Early in Housing Up-Cycle, 18 ideas – 8/29/12

MARKETING DECK: The Case for a Secular Bull Market: Why we see equities as best relative value – 4/13/12

SLIDES: Portfolio Strategy 2012 Update: Contrarian Optimism – 1/18/12

SLIDES: Portfolio Strategy 2012 Outlook: Eight Reasons to Be Contrarian in 2012; YE Target 1430 – 12/10/11

3PointsTV – Video

(Click the links below for 3PointsTV and to view the required video, click on the “PLAYLIST” option in the video screen.)

Weak ends to Sept favor positive Oct. Stick with Cyclicals – 9/28/12

We see a beta chase into YE larger than '09, '10 or '11 – 9/21/12

Raising S/T target to 1495 (vs 1475). Stay Cyclical – 9/14/12

As S&P 500 makes new 2012 highs, stay constructive – 9/7/12

We see 3-5 yr upcycle in US housing/construction – 8/30/12

Raising target on S&P 500 and focus on Cyclicals – 8/17/12

Economic momentum is (surprise) improving – 8/3/12

Case for a melt-up? – 7/27/12

Stealth energy rally forecast to continue into YE – 7/20/12

2Q12 EPS should help stocks, despite fears of disappointment – 7/13/12

http://jpmorgan.v.reutersinsider.com/PortfolioStrategy/









































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Analyst Certification: The research analyst(s) denoted by an “AC” on the cover of this report certifies (or, where multiple research analysts are primarily responsible for this report, the research analyst denoted by an “AC” on the cover or within the document individually certifies, with respect to each security or issuer that the research analyst covers in this research) that: (1) all of the views expressed in this report accurately reflect his or her personal views about any and all of the subject securities or issuers; and (2) no part of any of the research analyst's compensation was, is, or will be directly or indirectly related to the specific recommendations or views expressed by the research analyst(s) in this report.

Important Disclosures

Market Maker: JPMS makes a market in the stock of NiSource, Inc..

Lead or Co-manager: J.P. Morgan acted as lead or co-manager in a public offering of equity and/or debt securities for NiSource, Inc. within the past 12 months.

Client: J.P. Morgan currently has, or had within the past 12 months, the following company(ies) as clients: NiSource, Inc..

Client/Investment Banking: J.P. Morgan currently has, or had within the past 12 months, the following company(ies) as investment banking clients: NiSource, Inc..

Client/Non-Investment Banking, Securities-Related: J.P. Morgan currently has, or had within the past 12 months, the following company(ies) as clients, and the services provided were non-investment-banking, securities-related: NiSource, Inc..

Client/Non-Securities-Related: J.P. Morgan currently has, or had within the past 12 months, the following company(ies) as clients, and the services provided were non-securities-related: NiSource, Inc..

Investment Banking (past 12 months): J.P. Morgan received in the past 12 months compensation for investment banking NiSource, Inc..

Investment Banking (next 3 months): J.P. Morgan expects to receive, or intends to seek, compensation for investment banking services in the next three months from NiSource, Inc..

Non-Investment Banking Compensation: J.P. Morgan has received compensation in the past 12 months for products or services other than investment banking from NiSource, Inc..

Company-Specific Disclosures: Important disclosures, including price charts, are available for compendium reports and all J.P. Morgan–covered companies by visiting https://mm.jpmorgan.com/disclosures/company, calling 1-800-477-0406, or emailing [email protected] with your request.

Date Rating Share Price ($)

Price Target ($)

06-Nov-06 UW 23.63 --

30-Jul-07 N 19.23 --

09-Feb-09 N 10.79 10.00

22-May-09 N 10.48 11.00

05-Aug-09 N 12.97 14.00

25-Jan-10 N 14.67 16.00

05-May-10 N 16.60 15.00

05-Aug-10 N 16.72 17.00

02-Feb-11 N 18.35 18.00

05-May-11 N 19.55 19.00

The chart(s) show J.P. Morgan's continuing coverage of the stocks; the current analysts may or may not have covered it over the entire period. J.P. Morgan ratings or designations: OW = Overweight, N= Neutral, UW = Underweight, NR = Not Rated

0

10

20

30

40

Price($)

Oct06

Jul07

Apr08

Jan09

Oct09

Jul10

Apr11

NiSource, Inc. (NI, NI US) Price Chart

N $14 N $17 N $19

UW N N $10N $11 N $16N $15 N $18

Source: Bloomberg and J.P. Morgan; price data adjusted for stock splits and dividends.

Break in coverage Nov 06, 2006 - Jul 30, 2007.

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https://mm.jpmorgan.com/disclosures/company

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Explanation of Equity Research Ratings, Designations and Analyst(s) Coverage Universe: J.P. Morgan uses the following rating system: Overweight [Over the next six to twelve months, we expect this stock will outperform the average total return of the stocks in the analyst’s (or the analyst’s team’s) coverage universe.] Neutral [Over the next six to twelve months, we expect this stock will perform in line with the average total return of the stocks in the analyst’s (or the analyst’s team’s) coverage universe.] Underweight [Over the next six to twelve months, we expect this stock will underperform the average total return of the stocks in the analyst’s (or the analyst’s team’s) coverage universe.] Not Rated (NR): J.P. Morgan has removed the rating and, if applicable, the price target, for this stock because of either a lack of a sufficient fundamental basis or for legal, regulatory or policy reasons. The previous rating and, if applicable, the price target, no longer should be relied upon. An NR designation is not a recommendation or a rating. In our Asia (ex-Australia) and U.K. small- and mid-cap equity research, each stock’s expected total return is compared to the expected total return of a benchmark country market index, not to those analysts’ coverage universe. If it does not appear in the Important Disclosures section of this report, the certifying analyst’s coverage universe can be found on J.P. Morgan’s research website, www.morganmarkets.com.

J.P. Morgan Equity Research Ratings Distribution, as of September 28, 2012

Overweight(buy)

Neutral(hold)

Underweight(sell)

J.P. Morgan Global Equity Research Coverage 44% 44% 12%IB clients* 52% 46% 34%

JPMS Equity Research Coverage 42% 48% 10%IB clients* 69% 61% 53%

*Percentage of investment banking clients in each rating category.For purposes only of FINRA/NYSE ratings distribution rules, our Overweight rating falls into a buy rating category; our Neutral rating falls into a hold rating category; and our Underweight rating falls into a sell rating category. Please note that stocks with an NR designation are not included in the table above.

Equity Valuation and Risks: For valuation methodology and risks associated with covered companies or price targets for covered companies, please see the most recent company-specific research report at http://www.morganmarkets.com , contact the primary analyst or your J.P. Morgan representative, or email [email protected].

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"Other Disclosures" last revised September 29, 2012.

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